Income growth, inequality and preference for education investment: a note
AbstractBased on Glomm and Ravikumar (1992), this paper described the relation between preferences for educational investment for children and income growth or income inequality. The result derived using the constant relative risk aversion (CRRA) utility function differs from that derived using the log utility function. With the CRRA utility function, even if human capital is produced using constant returns to scale inputted by educational investment and parental human capital, the income converges to the steady state and income inequality vanishes in the long run, which is not derived by the log utility function.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 4 ()
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Educational investment; Income growth; Income inequality;
Find related papers by JEL classification:
- I2 - Health, Education, and Welfare - - Education
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
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- Christian Ferreda & MatÃas Tapia, 2010. "Redistributive Taxation, Incentives, and the Intertemporal Evolution of Human Capital," Documentos de Trabajo 390, Instituto de Economia. Pontificia Universidad Católica de Chile..
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