EconPapers    
Economics at your fingertips  
 

Human capital and income distribution in a model of corruption

Humna Ahsan and Keith Blackburn

Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester

Abstract: This paper studies the role of corruption in determining the distribution of income and, with this, the degree of poverty and inequality. The analysis is based on an overlapping generations model in which individuals may seek to improve their productive e¢ ciency by supplementing or substituting publicly-provided services (education and health care) with their own expenditures on human capital formation. Financial market imperfections mean that their ability to do this depends on their initial wealth status, implying the possibility of persistent inequality in multiple long-run equilibria. We show how corruption may exacerbate this by compromising public service provision. This occurs through the double whammy of both reducing the earnings and increasing the population of those who rely most on such services. Higher levels of corruption are associated with higher levels of poverty and may result in a complete polarisation between the rich and poor through the elimination of any middle class.

Pages: 31 pages
Date: 2015
New Economics Papers: this item is included in nep-dge and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://hummedia.manchester.ac.uk/schools/soss/cgbc ... apers/dpcgbcr208.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:man:cgbcrp:208

Access Statistics for this paper

More papers in Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Marianne Sensier ().

 
Page updated 2021-06-22
Handle: RePEc:man:cgbcrp:208