Inequality And Growth: Non-Monotonic Effects Via Education And Fertility
AbstractThis paper examines the effect of inequality upon economic growth. Much of the existing empirical literature has found a negative effect of inequality upon long run growth. In contrast, our theoretical model, in which heterogeneous individuals jointly determine the levels of investment in human capital and fertility, predicts that the effect of inequality upon growth is non-monotonic: inequality impedes growth in low fertility economies, but fosters growth in high fertility economies. We provide empirical support for this prediction by estimating a system of equations to which growth, investment in human capital, and fertility are endogenous.
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Bibliographic InfoPaper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 841.
Length: 39 pages
Date of creation: 2002
Date of revision:
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Postal: Department of Economics, The University of Melbourne, 5th Floor, Economics and Commerce Building, Victoria, 3010, Australia
Phone: +61 3 8344 5289
Fax: +61 3 8344 6899
Web page: http://www.economics.unimelb.edu.au
More information through EDIRC
Growth; Inequality; Human Capital; Fertility;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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