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Human Capital Formation, Income Inequality and Growth Author info | Abstract | Publisher info | Download info | Related research | Statistics Jean-Marie Viaene () (Erasmus University Rotterdam)
Itzhak Zilcha (The Eitan Berglas School of Economics, Tel Aviv University)
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The paper studies the determinants of income distribution and growth in an overlapping generations economy with heterogenous households. Our framework has the following main features: heterogeneity of consumers with respect to wealth and parental human capital; intergenerational transfers, accomplished via investment in the education of the younger generation. Heterogeneity in income results from the distribution of human capital across individuals in a non-degenerate way. The human capital production is affected by 'home-education' , provided by the parents, as well as 'public-education , which is provided equally to all young individuals of the same generation. Due to investments in human capital our economy exhibits endogenous growth. First, we explore the effects of technological change in human capital formation, upon the distribution of income at each date along the equilibrium path. Second, we study the impact of such technogical progress on growth and relate these results to the income distribution inequality. Third, we provide numerical simulations to quantify the effect of changes in the parameters of the model. Simulation results include exact Gini coefficients and tax rate on labor determined endogenously through majority voting.
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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number
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Date of creation: 12 Nov 2001Date of revision:
Handle: RePEc:dgr:uvatin:20010104Contact details of provider: Web page: http://www.tinbergen.nl/
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Keywords: Human Capital ; Income Distribution ; Endogenous Growth ; Other versions of this item:
Paper Viaene, Jean-Marie & Zilcha, Itzhak, 2001.
"Human Capital Formation, Income Inequality and Growth ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
[Downloadable!] Viaene, J.-M. & Zilcha, I., 2001.
"Human Capital Formation, Income Inequality and Growth ,"
Papers
2001-13, Tel Aviv.
Find related papers by JEL classification: D9 - Microeconomics - - Intertemporal Choice and Growth E2 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment F2 - International Economics - - International Factor Movements and International Business J2 - Labor and Demographic Economics - - Demand and Supply of Labor
This paper has been announced in the following NEP Reports :
References listed on IDEAS 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.: Viaene, Jean-Marie & Zilcha, Itzhak, 2002.
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Other versions: Glomm, Gerhard & Ravikumar, B, 1992.
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Boyan Jovanovic & Yaw Nyarko, 1994.
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NBER Working Papers
4823, National Bureau of Economic Research, Inc.
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94-25, C.V. Starr Center for Applied Economics, New York University.
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"Preferences Over Education Expenditure ,"
Department of Economics - Working Papers Series
623, The University of Melbourne.
Galor, Oded & Moav, Omer, 1998.
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CEPR Discussion Papers
1972, C.E.P.R. Discussion Papers.
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Persson, Torsten & Tabellini, Guido, 1994.
"Is Inequality Harmful for Growth? ,"
American Economic Review ,
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Other versions: Park, Kang H., 1996.
"Educational expansion and educational inequality on income distribution ,"
Economics of Education Review ,
Elsevier, vol. 15(1), pages 51-58, February.
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Mikael Lindahl, 2005.
"Home versus School Learning: A New Approach to Estimating the Effect of Class Size on Achievement ,"
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Other versions: Loury, Glenn C, 1981.
"Intergenerational Transfers and the Distribution of Earnings ,"
Econometrica ,
Econometric Society, vol. 49(4), pages 843-67, June.
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Zvi Eckstein & Itzhak Zilcha, 1991.
"The Effects of Compulsory Schooling on Growth, Income Distribution and Welfare ,"
Boston University - Institute for Economic Development
20, Boston University, Institute for Economic Development.
Other versions:
Eckstein, Z. & Zilcha, I., 1991.
"The Effects of Compulsury Schooling on Growth Income Distribution and Welfare ,"
Papers
38-91, Tel Aviv.
Eckstein, Zvi & Zilcha, Itzhak, 1994.
"The effects of compulsory schooling on growth, income distribution and welfare ,"
Journal of Public Economics ,
Elsevier, vol. 54(3), pages 339-359, July.
[Downloadable!] (restricted) Eicher, Theo S, 1996.
"Interaction between Endogenous Human Capital and Technological Change ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 63(1), pages 127-44, January.
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Knight, John & Li, Shi, 1996.
"Educational Attainment and the Rural--Urban Divide in China ,"
Oxford Bulletin of Economics and Statistics ,
Department of Economics, University of Oxford, vol. 58(1), pages 83-117, February.
Karni, E. & Zilcha, I., 1993.
"Technological Progress and Income Inequality: A Model with Human Capital and Bequest ,"
Papers
8-93, Tel Aviv - the Sackler Institute of Economic Studies.
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"On the mechanics of economic development ,"
Journal of Monetary Economics ,
Elsevier, vol. 22(1), pages 3-42, July.
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references Cited by : (explanations , 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.)
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"Measuring and Ranking Value Drivers ,"
Tinbergen Institute Discussion Papers
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Nikos Benos, 2004.
"Education Policies and Economic Growth ,"
University of Cyprus Working Papers in Economics
4-2004, University of Cyprus Department of Economics.
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Klump, Rainer & Prüfer, Patricia, 2005.
"How to prioritise policies for poverty reduction: Applying Bayesian Model Averaging to Vietnam ,"
Proceedings of the German Development Economics Conference, Kiel 2005
27, Verein für Socialpolitik, Research Committee Development Economics.
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Nicolas Bauduin & Joël Hellier, 2006.
"Skill Dynamics, Inequality and Social Policies ,"
Working Papers
34, ECINEQ, Society for the Study of Economic Inequality.
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Nikos Benos, 2005.
"Education Systems, Growth and Welfare ,"
University of Cyprus Working Papers in Economics
5-2005, University of Cyprus Department of Economics.
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Klump, Rainer & Pruefer, Patricia, 2006.
"Prioritizing policies for pro-poor growth: applying bayesian model averaging to Vietnam ,"
Discussion Paper
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