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Sorting And Long-Run Inequality

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  • Raquel Fernández
  • Richard Rogerson

Abstract

Many social commentators have raised concerns over the possibility that increased sorting in society may lead to greater inequality. To investigate this, we construct a dynamic model of intergenerational education acquisition, fertility, and marital sorting and parameterize the steady state to match several basic empirical findings. We find that increased sorting will significantly increase income inequality. Four factors are important to our findings: a negative correlation between fertility and education, a decreasing marginal effect of parental education on children's years of education, wages that are sensitive to the relative supply of skilled workers, and borrowing constraints that affect educational attainment for some low-income households. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 116 (2001)
Issue (Month): 4 (November)
Pages: 1305-1341

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Handle: RePEc:tpr:qjecon:v:116:y:2001:i:4:p:1305-1341

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  14. Cooper, Suzanne J, 1998. " A Positive Theory of Income Redistribution," Journal of Economic Growth, Springer, vol. 3(2), pages 171-95, June.
  15. Fernandez, Raquel & Rogerson, Richard, 1998. "Public Education and Income Distribution: A Dynamic Quantitative Evaluation of Education-Finance Reform," American Economic Review, American Economic Association, vol. 88(4), pages 813-33, September.
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  1. No, Online Dating Is Not Increasing Income Inequality
    by Rob Wile in Business Insider on 2013-10-22 16:32:00
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