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Internet, Literacy and Earnings Inequality

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  • Alain Trannoy

Abstract

This paper outlines a theoretical framework to think about the role of NIT on earnings inequality at a domestic level. Two main ideas inspired a growth model. First, to be connected is only meaningful for people who are already literate. Second internet, like the invention of printing, permits to increase the part of knowledge that an individual can use. The results are obtained in terms of the Lorenz criterion. The role of some key parameters is emphasized like the elasticity of substitution between talent and knowledge. Two forces are at work. On the one hand, the gap between literate and non literate people will increase. On the other hand, the incentive to become literate increases. Policy implications are derived.

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Bibliographic Info

Article provided by De Boeck Université in its journal Recherches économiques de Louvain.

Volume (Year): 68 (2002)
Issue (Month): 1 ()
Pages: 125-147

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Handle: RePEc:cai:reldbu:rel_681_0125

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  1. Garcia-Penalosa, Cecilia & Aghion, Philippe & Caroli, Eve, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Economics Papers from University Paris Dauphine 123456789/10091, Paris Dauphine University.
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  7. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
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  9. Peter H. Lindert, . "Three Centuries Of Inequality In Britain And America," Department of Economics 97-09, California Davis - Department of Economics.
  10. Jenkins, Stephen P, 1995. "Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971-86," Economica, London School of Economics and Political Science, vol. 62(245), pages 29-63, February.
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