Education, Income Distribution, and Growth: The Local Connection
AbstractThis paper develops a simple model of human capital accumulation and community formation by heterogeneous families, which provides an integrated framework for analysing the local determinants of inequality and growth. Five main conclusions emerge. First, minor differences in education technologies, preferences, or wealth, can lead to a high degree of stratification. Imperfect capital markets are not necessary, but will compound these other sources. Second, stratification makes inequality in education and income more persistent across generations. Whether the same is true of inequality in total wealth depends on the ability of the rich to appropriate the rents created by their secession. Third, the polarization of urban areas resulting from individual residential decisions can be quite inefficient, both from the point of view of aggregate growth and in the Pareto sense, especially in the long run. Fourth, when state-wide equalization of school expenditures is insufficient to reduce stratification, it may improve educational achievement in poor communities much less than it lowers it in richer communities; thus average academic performance and income growth both fall. Yet it may still be possible for education policy to improve both equity and efficiency. Fifth, because of the cumulative nature of the stratification process, it is likely to be much harder to reverse once it has run its course than to arrest at an early stage.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 995.
Date of creation: Jul 1994
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Benabou, R., 1994. "Education, Income Distribution, and Growth: The Local Connection," Working papers 94-16, Massachusetts Institute of Technology (MIT), Department of Economics.
- Roland Benabou, 1994. "Education, Income Distribution and Growth: The Local Connection," NBER Working Papers 4798, National Bureau of Economic Research, Inc.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
- Galor, Oded & Zeira, Joseph, 1993.
"Income Distribution and Macroeconomics,"
Review of Economic Studies,
Wiley Blackwell, vol. 60(1), pages 35-52, January.
- Anne C. Case & Lawrence F. Katz, 1991.
"The Company You Keep: The Effects of Family and Neighborhood on Disadvantaged Youths,"
NBER Working Papers
3705, National Bureau of Economic Research, Inc.
- Case, A.C. & Katz, L.F., 1991. "The Company You Keep: The Effects Of Family And Neighborhood On Disadvantaged Younths," Harvard Institute of Economic Research Working Papers 1555, Harvard - Institute of Economic Research.
- Card, David & Krueger, Alan B, 1992.
"Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States,"
Journal of Political Economy,
University of Chicago Press, vol. 100(1), pages 1-40, February.
- David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," NBER Working Papers 3358, National Bureau of Economic Research, Inc.
- David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Working Papers 645, Princeton University, Department of Economics, Industrial Relations Section..
- Cornes, Richard, 1993. "Dyke Maintenance and Other Stories: Some Neglected Types of Public Goods," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 259-71, February.
- De Gregorio, Jose & Lee, Jong-Wha, 2002. "Education and Income Inequality: New Evidence from Cross-Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
- Elizabeth Oltmans Ananat, 2007. "The Wrong Side(s) of the Tracks Estimating the Causal Effects of Racial Segregation on City Outcomes," NBER Working Papers 13343, National Bureau of Economic Research, Inc.
- Bardhan, Pranab, 1997. "Method in the madness? a political-economy analysis of the ethnic conflicts in less developed countries," World Development, Elsevier, vol. 25(9), pages 1381-1398, September.
- Beitia, Arantza, 2002. "Regulation in education," Regional Science and Urban Economics, Elsevier, vol. 32(6), pages 709-735, November.
- Adriana Marina, 2000. "Economic convergence of the first and second moment in the provinces of Argentina," Estudios de Economia, University of Chile, Department of Economics, vol. 27(2 Year 20), pages 259-277, December.
- Barr & Oduro, Abena, 2000. "Ethnicity and wage determination in Ghana," Policy Research Working Paper Series 2506, The World Bank.
- Edward E. Glaeser & Bruce Sacerdote & Jose A. Scheinkman, 1995.
"Crime and Social Interactions,"
Harvard Institute of Economic Research Working Papers
1738, Harvard - Institute of Economic Research.
- William A. Brock & Steven N. Durlauf, 1995.
"Discrete Choice with Social Interactions I: Theory,"
95-10-084, Santa Fe Institute.
- William A. Brock & Steven N. Durlauf, 1995. "Discrete Choice with Social Interactions I: Theory," NBER Working Papers 5291, National Bureau of Economic Research, Inc.
- Brock, W.A. & Durlauf, S.N., 1995. "Discrete Choice with Social Interactions I: Theory," Working papers 9521, Wisconsin Madison - Social Systems.
- Kevin Sylwester, 2003. "Income Inequality And Population Density 1500 Ad: A Connection," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 28(2), pages 61-82, December.
- José De Gregorio & Jong-Wha Lee, 1999. "Education and Income Distribution: New Evidence from Cross-country Data," Documentos de Trabajo 55, Centro de Economía Aplicada, Universidad de Chile.
- Kim, Taejong & Lee, Ju-Ho & Lee, Young, 2008. "Mixing versus sorting in schooling: Evidence from the equalization policy in South Korea," Economics of Education Review, Elsevier, vol. 27(6), pages 697-711, December.
- Murat F. Iyigun, 1995. "Economic development and intergenerational economic mobility," International Finance Discussion Papers 524, Board of Governors of the Federal Reserve System (U.S.).
- Robson, Arthur J & Wooders, Myrna, 1997. "On the Growth-Maximizing Distribution of Income," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 511-26, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.