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Inequality and growth: the dual role of human capital in development

  • Eicher, Theo S.
  • Garcia-Penalosa, Cecilia

This paper examines how the accumulation of human capital determines both a country's growth rate and income inequality . In contrast to previous work, we do not rely on credit market imperfectionf or political economy arguments. The insight of this model is that inequality is determined by the relative strength of the forces increasing the supply of skills -education- and those increasing the demand for skills -technical change-.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 66 (2001)
Issue (Month): 1 (October)
Pages: 173-197

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Handle: RePEc:eee:deveco:v:66:y:2001:i:1:p:173-197
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