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Income growth, inequality and preference for education investment: a note

Author

Listed:
  • Minoru Watanabe

    (Kobe University)

  • Masaya Yasuoka

    (The University of Kitakyushu)

Abstract

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.

Suggested Citation

  • Minoru Watanabe & Masaya Yasuoka, 2009. "Income growth, inequality and preference for education investment: a note," Economics Bulletin, AccessEcon, vol. 29(4), pages 3075-3082.
    • Handle: RePEc:ebl:ecbull:eb-09-00726
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I4-P296.pdf
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    Citations

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    Cited by:

    1. Christian Ferreda & Matías Tapia, 2010. "Redistributive Taxation, Incentives, and the Intertemporal Evolution of Human Capital," Documentos de Trabajo 390, Instituto de Economia. Pontificia Universidad Católica de Chile..

    More about this item

    Keywords

    Educational investment; Income growth; Income inequality;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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