This paper examines the relationship between the incentive to free ride and inequality by studying the case in which agents invest in human capital and then provide public goods privately. An agent's stock of human capital is affected by his parental stock; the more human capital a parent has, the more effectively his child can learn. Then, the incentives to free ride at provision of public goods in the old period are different among agents. We find that an agent born of a well-educated parent studies harder than an agent born of a less-educated parent, which induces persistent inequality. (JEL Classifications: H41, O15)
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Paper provided by Graduate School of Economics and Business Administration, Hokkaido University in its series Discussion paper series. A with number
159.
Find related papers by JEL classification: H41 - Public Economics - - Publicly Provided Goods - - - Public Goods O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration