Income Inequality, Human Capital Accumulation And Economic Performance  

Oleh:

Chiu, W. Henry

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 108 no. 446 (Jan. 1998), page 44-59.
Fulltext: 44.pdf (225.31KB)

Isi artikel

We show that greater income equality implies higher human capital accumulation and economic performance in an overlapping-generations model with heterogeneity in income and talent. Given liquidity constraints and declining marginal utility, individuals with a given level of talent receive education if their initial income is higher than a threshold level and the threshold is lower for more talented individuals. Assuming the more talented create more human capital when educated, greater initial income equality for one generation then imply not only higher aggregate human capital accumulated by that generation but an improvement in all subseqent generations' initial income distributions.

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