Signalling equilibrium, Intergenerational mobility and long-run growth
AbstractThis paper provides a signalling model of endogenous growth in which innate talents and education levels of workers drive the basic scientific knowledge and adoptive knowledge accumulation processes. Whether talented individuals get properly educated and are employed in the appropriate technical sectors are determined by the perfectly competitive employers' beliefs about the relationship between talent and education level. Innate talent of a worker is a private knowledge and it is distributed independent of the individual's family backgrounds; education level of workers act as a signalling device for talents as well as it improves their productivities; the family backgrounds and talents of workers determine their optimal education level, which in turn determines the degree of social mobility. The model generates multiple balanced growth paths which differ in the degree of intergenerational social mobility and growth rate. The paper analyzes policies that generate equilibrium paths with higher social mobility, growth in income and Pareto superior allocations.
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Bibliographic InfoPaper provided by EconWPA in its series GE, Growth, Math methods with number 9603002.
Length: 19 pages
Date of creation: 19 Mar 1996
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Signaling Equilibrium; Social Mobility; Endogenous Growth;
Find related papers by JEL classification:
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
- D3 - Microeconomics - - Distribution
- D9 - Microeconomics - - Intertemporal Choice
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- Otter, Thomas, 2007. "Does Inequality Harm Income Mobility and Growth? An Assessment of the Growth Impact of Income and Education Inequality in Paraguay 1992: 2002," Proceedings of the German Development Economics Conference, GÃ¶ttingen 2007 25, Verein für Socialpolitik, Research Committee Development Economics.
- Sebastian Galiani, 2010.
"Social Mobility: What is it and why does it matter?,"
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0101, CEDLAS, Universidad Nacional de La Plata.
- Sebastián Galiani, 2013. "Social Mobility: What is it and Why Does it Matter?," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 59, pages 167-229, January-D.
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"Low Social Mobility in Bolivia: Causes and Consequences for Development,"
Documentos de trabajo
3/2001, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
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- Lykke E. Andersen & Alice Brooks & Alejandro F. Mercado, 2004. "Macroeconomic Policies to Increase Social Mobility and Growth in Bolivia," Development Research Working Paper Series 02/2004, Institute for Advanced Development Studies.
- Lykke Andersen, 2001. "Social Mobility in Latin America: Links with Adolescent Schooling," Research Department Publications 3130, Inter-American Development Bank, Research Department.
- Thomas Otter, 2009. "Does Inequality Harm Income Mobility and Growth? An Assessment of the Growth Impact of Income and Education Inequality in Paraguay 1992-2002," Ibero America Institute for Econ. Research (IAI) Discussion Papers 188, Ibero-America Institute for Economic Research.
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