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Aspirations, Segregation, and Occupational Choice

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  • Dilip Mookherjee
  • Stefan Napel
  • Debraj Ray

Abstract

This paper examines the steady states of an overlapping generations economy with a given distribution of household locations over a one-dimensional interval. Parents decide whether or not to educate their children. Educational decisions are affected by location: There are local complementarities in investment incentives stemming from aspirations formation, learning spillovers, or local public goods. At the same time, economy-wide wages endogenously adjust to bring factor supplies into line with demand. The model therefore combines local social interaction with global market interaction. The paper studies steady-state configurations of skill acquisition, both with and without segregation. The model is used to compare macroeconomic and welfare properties of segregated and unsegregated steady states. (JEL: D31, O15, D85) (c) 2010 by the European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 8 (2010)
Issue (Month): 1 (03)
Pages: 139-168

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Handle: RePEc:tpr:jeurec:v:8:y:2010:i:1:p:139-168

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  1. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  2. Dilip Mookherjee & Stefan Napel & Debraj Ray, 2010. "Aspirations, Segregation, and Occupational Choice," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 139-168, 03.
  3. Mookherjee, Dilip & Napel, Stefan, 2007. "Intergenerational mobility and macroeconomic history dependence," Journal of Economic Theory, Elsevier, vol. 137(1), pages 49-78, November.
  4. Romans Pancs & Nicolaas J. Vriend, 2003. "Schelling's Spatial Proximity Model of Segregation Revisited," Computing in Economics and Finance 2003 63, Society for Computational Economics.
  5. Christian Ghiglino & Sanjeev Goyal, 2010. "Keeping Up with the Neighbors: Social Interaction in a Market Economy," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 90-119, 03.
  6. Napel, Stefan & Schneider, Andrea, 2006. "Intergenerational talent transmission, inequality, and social mobility," Working Paper 52/2006, Helmut Schmidt University, Hamburg.
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Cited by:
  1. Marcus Böhme, 2012. "Migration and Education Aspirations - Another Channel of Brain Gain?," Kiel Working Papers 1811, Kiel Institute for the World Economy.
  2. Dibyendu S. Maiti & Arup Mitra, 2010. "Skills, Informality and Development," Working Papers id:3115, eSocialSciences.
  3. Isidro Soloaga & Mariana Pereira, 2013. "External Returns to Higher Education in Mexico 2000-2010," Working Papers 0313, Universidad Iberoamericana, Department of Economics.
  4. Dilip Mookherjee & Stefan Napel & Debraj Ray, 2008. "Aspirations, Segregation and Occupational Choice," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-182, Boston University - Department of Economics.
  5. Koczan, Zs, 2013. "Does identity matter," Cambridge Working Papers in Economics 1313, Faculty of Economics, University of Cambridge.
  6. Christian Ghiglino & Sanjeev Goyal, 2010. "Keeping Up with the Neighbors: Social Interaction in a Market Economy," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 90-119, 03.
  7. Chiapa, Carlos & Garrido, José Luis & Prina, Silvia, 2012. "The effect of social programs and exposure to professionals on the educational aspirations of the poor," Economics of Education Review, Elsevier, vol. 31(5), pages 778-798.
  8. CESI, Berardino & PAOLINI, dimitri, 2012. "Peer group and distance: when widening university participation is better," CORE Discussion Papers 2012042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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