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Human Capital Inequality, Life Expectancy And Economic Growth

  • Amparo Castelló-Climent
  • Rafael Doménech

This article presents a model in which inequality affects per capita income when individuals decide to invest in education taking into account their life expectancy, which depends to a large extent on the human capital of their parents. Our results show the existence of multiple steady states depending on the initial distribution of education. The low steady state is a poverty trap in which children raised in poor families have low life expectancy and work as non-educated workers. The empirical evidence suggests that the life expectancy mechanism explains a major part of the relationship between inequality and human capital accumulation. Copyright © 2008 The Author(s).

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 118 (2008)
Issue (Month): 528 (04)
Pages: 653-677

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Handle: RePEc:ecj:econjl:v:118:y:2008:i:528:p:653-677
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