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A Positive Theory of Income Redistribution

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  • Cooper, Suzanne J
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    Abstract

    This article examines how redistribution of human capital expenditure can come about voluntarily. A model is developed in which, in the absence of redistribution, human capital expenditure is financed through tax revenue collected locally. However, circumstances are shown under which transfers of human capital expenditure across neighborhoods can take place voluntarily, even in the absence of interfamily altruism. These transfers can eliminate absolute inequality and reduce relative inequality. In addition, the effect on aggregate income of such human capital funding transfers across neighborhoods is evaluated. Empirical evidence supporting the model's implications for the impact of redistribution of human capital expenditure on the persistence of income inequality is presented Copyright 1998 by Kluwer Academic Publishers

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    Bibliographic Info

    Article provided by Springer in its journal Journal of Economic Growth.

    Volume (Year): 3 (1998)
    Issue (Month): 2 (June)
    Pages: 171-95

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    Handle: RePEc:kap:jecgro:v:3:y:1998:i:2:p:171-95

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    Web page: http://www.springerlink.com/link.asp?id=102931

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    1. Galor, O. & Tsiddon, D., 1996. "The Distribution of Human Capital and Economic Growth," Papers 18-96, Tel Aviv - the Sackler Institute of Economic Studies.
    2. Steven N. Durlauf, 1992. "A Theory of Persistent Income Inequality," NBER Working Papers 4056, National Bureau of Economic Research, Inc.
    3. Eric A. Hanushek & Steven G. Rivkin & Lori L. Taylor, 1996. "Aggregation and the Estimated Effects of School Resources," NBER Working Papers 5548, National Bureau of Economic Research, Inc.
    4. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
    5. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
    6. Datcher, Linda P, 1982. "Effects of Community and Family Background on Achievement," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 32-41, February.
    7. Streufert, Peter, 2000. " The Effect of Underclass Social Isolation on Schooling Choice," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(4), pages 461-82.
    8. de Bartolome, Charles A M, 1990. "Equilibrium and Inefficiency in a Community Model with Peer Group Effects," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 110-33, February.
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    Cited by:
    1. Fernandez, Raquel, 2002. "Education, segregation and marital sorting: theory and an application to the UK," European Economic Review, Elsevier, vol. 46(6), pages 993-1022, June.
    2. Deininger, Klaus & Olinto, Pedro, 2000. "Asset distribution, inequality, and growth," Policy Research Working Paper Series 2375, The World Bank.
    3. Raquel Fernández & Richard Rogerson, 2001. "Sorting And Long-Run Inequality," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1305-1341, November.
    4. Raquel Fernandez, 2001. "Sorting, Education and Inequality," NBER Working Papers 8101, National Bureau of Economic Research, Inc.
    5. Fernández, Raquel, 2001. "Sorting, Education and Inequality," CEPR Discussion Papers 3020, C.E.P.R. Discussion Papers.

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