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A Classical Model Of Education, Growth, And Distribution

Author

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  • Dutt, Amitava Krishna
  • Veneziani, Roberto

Abstract

We develop a classical macroeconomic model to examine the growth and distributional consequences of education. Contrary to the received wisdom, we show that human capital accumulation is not necessarily growth-inducing and inequality-reducing. Expansive education policies may foster growth and reduce earning inequalities between workers, but only by transferring income from workers to capitalists. Further, the overall effect of an increase in education depends on the actual characteristics of the educational system and on the nature of labor market relations. Although the primary aim of the paper is theoretical, we argue that the model identifies some causal mechanisms that can contribute to shed light on recent stylized facts on growth, distribution, and education for the USA.

Suggested Citation

  • Dutt, Amitava Krishna & Veneziani, Roberto, 2020. "A Classical Model Of Education, Growth, And Distribution," Macroeconomic Dynamics, Cambridge University Press, vol. 24(5), pages 1186-1221, July.
    • Handle: RePEc:cup:macdyn:v:24:y:2020:i:5:p:1186-1221_7
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    Citations

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    Cited by:

    1. Gustavo Pereira Serra, 2025. "(Trying to) catch up with the higher-skilled Joneses: student loans in a segmented educational market from a post-Keynesian perspective," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 48(2), pages 172-203, April.
    2. Chu, Angus C. & Kou, Zonglai & Wang, Xilin, 2023. "Class struggle in a Schumpeterian economy," China Economic Review, Elsevier, vol. 82(C).
    3. Stamegna, Marco, 2022. "Wage inequality and induced innovation in a classical-Marxian growth model," MPRA Paper 113805, University Library of Munich, Germany.
    4. Gogol Mitra Thakur, 2023. "Modern services led growth and development in a structuralist dual economy: Long‐run implications of skilled labor constraint," Metroeconomica, Wiley Blackwell, vol. 74(4), pages 748-776, November.
    5. Gilberto Tadeu Lima & Laura Barbosa de Carvalho & Gustavo Pereira Serra, 2024. "Human Capital Accumulation and Output Growth in Demand-led Macrodynamics," Working Papers, Department of Economics 2024_23, University of São Paulo (FEA-USP), revised 28 Aug 2024.
    6. Hiroaki Sasaki, 2025. "The paradox of technological progress, growth, distribution, and employment in a demand-led framework," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 48(3), pages 542-574, July.
    7. Marco Stamegna, 2024. "Wage inequality and induced innovation in a classical-Marxian growth model," Journal of Evolutionary Economics, Springer, vol. 34(1), pages 127-168, January.

    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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