Education Policy and Income Inequality When Aptitude Is Innate

Peter Kennedy and Herbert Schuetze

No 2404, Department Discussion Papers from Department of Economics, University of Victoria

Abstract: We characterize the educational choices made by workers in terms of their innate aptitudes and how closely those aptitudes match available job types. A worker can choose to specialize in a narrow field or pursue a more general education based on the closeness of that match. Workers fortunate enough to have an innate aptitude closely matched to a job type will become highly specialized, and will reap high market rewards. Less fortunate workers will be less well-rewarded. Thus, there arises a distribution of income in the economy. The mean, variance and skewness of that distribution is a function of education policy, relating in particular to the educational opportunities made available, and how they are funded, whether through income tax or tuition charges. We cast this policy choice in terms of picking a point on a Kuznets curve, which dictates the relationship between average income and income-equality in this economy.

Keywords: human capital; specialization; education (search for similar items in EconPapers)
Pages: 27 pages
Date: 2024-12
New Economics Papers: this item is included in nep-lma
Note: ISSN 1914-2838 JEL Classification: J24, I24, I26, I28
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.uvic.ca/socialsciences/economics/_assets/docs/discussion/ddp2404.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:vic:vicddp:2404

Access Statistics for this paper

More papers in Department Discussion Papers from Department of Economics, University of Victoria PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2. Contact information at EDIRC.
Bibliographic data for series maintained by Kali Moon ().