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Education and the poverty Trap

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Author Info
Vicky Barham
Maurice Marchand
Pierre Pestieau

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Abstract

An overlapping generations models is constructed in which individual wealth is related to educational attainment, and in which liquidity constraints may induce children to invest in a sub-optimal level of education given their ability. Borrowing for educational attainment is obtained from within the family. Abilities differs among children and may be related to parental ability. Stationary state equilibria are found to exist in which children of poorer families are caught in a poverty trap because of an inability to finance their education. The role of redistributive policy is studied in this context.

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Publisher Info
Paper provided by Queen's University, Department of Economics in its series Working Papers with number 830.

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Length: 21 pages
Date of creation: 1991
Date of revision:
Handle: RePEc:qed:wpaper:830

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Keywords: education ; wealth;

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  1. Guy TCHIBOZO, 1999. "Updating the analysis of the determinants of the demand for education," Working Papers of BETA 9916, Bureau d'Economie Théorique et Appliquée, ULP, Strasbourg. [Downloadable!]
  2. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2007. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," NBER Working Papers 12884, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Toni Mora, 2008. "Factors conditioning the formation of European regional convergence clubs," The Annals of Regional Science, Springer, vol. 42(4), pages 911-927, December. [Downloadable!] (restricted)
  4. Berthold Wigger, 2001. "Higher Education Financing and Income Redistribution," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. John Fender & Ping Wang, 2000. "Educational Policy and Skill Heterogeneity with Credit Market Imperfections," Working Papers 0021, Department of Economics, Vanderbilt University. [Downloadable!]
  6. Eric V. Edmonds & Norbert Schady, 2009. "Poverty Alleviation and Child Labor," NBER Working Papers 15345, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Toni Mora, 2005. "Conditioning factors on regional European clubs - a distributional approach," ERSA conference papers ersa05p302, European Regional Science Association. [Downloadable!]
  8. Mueller, Valerie & Shariff, Abusaleh, 2009. "Preliminary evidence on internal migration, remittances, and teen schooling in India:," IFPRI discussion papers 858, International Food Policy Research Institute (IFPRI). [Downloadable!]
  9. Tomer Blumkin & Efraim Sadka, 2008. "A case for taxing education," International Tax and Public Finance, Springer, vol. 15(2), pages 145-163, April. [Downloadable!] (restricted)
  10. Abhijit Banerjee, 2007. "Educational Policy and the Economics of the Family," Working Papers id:1186, esocialsciences.com. [Downloadable!]
  11. Eric Edmonds, 2007. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," Working Papers id:999, esocialsciences.com. [Downloadable!]
  12. Craig Brett & John A. Weymark, 2000. "Financing Education Using Optimal Redistributive Taxation," Working Papers 0038, Department of Economics, Vanderbilt University, revised May 2001. [Downloadable!]
    Other versions:
  13. Elena Del Rey & Marìa del Mar Racionero, 2001. "Optimal educational choice and redistribution when cultural background matters," CSEF Working Papers 59, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
  14. Nicolas Bauduin & Joël Hellier, 2006. "Skill Dynamics, Inequality and Social Policies," Working Papers 34, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
  15. Anderberg, Dan & Balestrino, Alessandro, 2001. "Self-Enforcing Intergenerational Transfers and the Provision of Education," CEPR Discussion Papers 3107, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  16. Leonid Azarnert, 2006. "Free Education: For Whom, Where and When?," DEGIT Conference Papers c011_024, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  17. Evan Borkum, 2009. "Can eliminating school fees in poor districts boost enrollment? Evidence from South Africa," Discussion Papers 0910-06, Columbia University, Department of Economics. [Downloadable!]
  18. John Fender & Ping Wang, 2001. "Educational Policy in a Credit Constrained Economy with Skill Heterogeneity," Working Papers 0133, Department of Economics, Vanderbilt University. [Downloadable!]
    Other versions:
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