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Schooling, learning on-the-job, earnings and inequality

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  • Luis P. Correia

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    Abstract

    Why might people in poor countries leave school earlier and invest less in learning on-thejob than people in rich ones? How do these human capital decisions impact on inequality? To give quantitative answers to these questions, I build an overlapping generations model with optimal human capital accumulation and a given distribution of abilities. Variation in mortality and population growth rates can generate large variability in schooling decisions, earnings profiles and measures of inequality. High mortality and population growth rates are shown to produce comparatively little investment in human capital, flat earnings profiles and low inequality, both within and across cohorts.

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    File URL: http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp06585.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 06/585.

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    Length: 42 pages
    Date of creation: May 2006
    Date of revision:
    Handle: RePEc:bri:uobdis:06/585

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    Keywords: human capital; earnings profiles; schooling; inequality.;

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