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Persistent Inequality: An Explanation Based on Limited Parental Altruism

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  • Mausumi Das

    (Delhi School of Economics)

Abstract

This paper provides an explanation for the observed persistence in income inequality across households in terms limited parental altruism. We postulate that the degree of parental altruism is 'limited' by the financial status of the parent. A poor parent not only has less ability, but also has less concern about children's welfare. This generates a non-linearity in the human capital formation for poor vis-à-vis rich households. With a constant returns to scale technology for human capital formation it implies that initial income differences may perpetuate over time. We also derive the conclusion that the initial distribution of income is important for long run growth - a conclusion that conforms to some of the recent works in this field, notably that of Galor and Zeira.

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Bibliographic Info

Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 101.

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Length: 21 pages
Date of creation: Jun 2002
Date of revision:
Handle: RePEc:cde:cdewps:101

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Keywords: Income distribution; human capital; intergenerational mobility; growth;

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References

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Cited by:
  1. Kuku, Oluyemisi & Gundersen, Craig & Garasky, Steven, 2011. "Differences in food insecurity between adults and children in Zimbabwe," Food Policy, Elsevier, vol. 36(2), pages 311-317, April.
  2. Joël Hellier & Stéphane Lambrecht, 2012. "Inequality, growth and welfare: The main links," Working Papers 258, ECINEQ, Society for the Study of Economic Inequality.
  3. Fitz, Dylan, 2013. "Development Chutes and Ladders: A Joint Impact Evaluation of Asset and Cash Transfers in Brazil," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150254, Agricultural and Applied Economics Association.
  4. Beladi, Hamid & Marjit, Sugata & Broll, Udo, 2011. "Capital mobility, skill formation and polarization," Economic Modelling, Elsevier, vol. 28(4), pages 1902-1906, July.
  5. Ben-Halima, B. & Chusseau, N. & Hellier, J., 2014. "Skill premia and intergenerational education mobility: The French case," Economics of Education Review, Elsevier, vol. 39(C), pages 50-64.
  6. Matsuo, Miki & Tomoda, Yasunobu, 2012. "Human capital Kuznets curve with subsistence consumption level," Economics Letters, Elsevier, vol. 116(3), pages 392-395.
  7. Nathalie Chusseau & Joël Hellier, 2011. "Educational Systems, Intergenerational Mobility and Social Segmentation," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 203-233, December.

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