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Transitioning Out Of Poverty

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  • David Brasington
  • Mika Kato
  • Willi Semmler

Abstract

We analyze the role of social environment and human capital formation in persistence of poverty and inequality. We present a Romer type variety model where the presence of economies of agglomeration in social environment may cause two basins of attraction; whereby we may interpret the lower basin as a poverty trap and the upper basin as a take‐off region. We then consider the size of income transfer to regions and its effect on inequality and welfare. We provide supporting evidence of existing inequality and poverty trap using educational attainment data for the USA.

Suggested Citation

  • David Brasington & Mika Kato & Willi Semmler, 2010. "Transitioning Out Of Poverty," Metroeconomica, Wiley Blackwell, vol. 61(1), pages 68-95, February.
    • Handle: RePEc:bla:metroe:v:61:y:2010:i:1:p:68-95
    DOI: 10.1111/j.1467-999X.2009.04062.x
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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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