Income growth, inequality and preference for education investment: a note
Based on Glomm and Ravikumar (1992), this paper described the relation between preferences for educational investment for children and income growth or income inequality. The result derived using the constant relative risk aversion (CRRA) utility function differs from that derived using the log utility function. With the CRRA utility function, even if human capital is produced using constant returns to scale inputted by educational investment and parental human capital, the income converges to the steady state and income inequality vanishes in the long run, which is not derived by the log utility function.
Volume (Year): 29 (2009)
Issue (Month): 4 ()
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