Dual Poverty Trap
AbstractThis paper constructs an overlapping generations model of search equilibrium that analyzes intergenerational and coordination traps simultaneously. When parents are uneducated, their children often face difficulty in finishing school, and therefore likely to remain uneducated. In addition, if children expect that other children of the same generation do not receive education, they anticipate that firms will not create enough jobs for educated and thus are discouraged from schooling. These two mechanisms of poverty trap reinforce each other-creating a dual poverty trap. Escaping from the trap requires a combined, not separate, implementation of financial assistance for schooling and policies for changing agentsf expectation.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 06-12.
Length: 25 pages
Date of creation: May 2006
Date of revision:
overlapping generations model; education; intergenerational externality; job search.;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
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