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A simple model of inequality, occupational choice, and development

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  • Ghatak, Maitreesh
  • Nien-Huei Jiang, Neville

Abstract

This paper analyzes a simple and tractable model of occupational choice in the presence of credit market imperfections. We examine the relative roles of parameters governing technology and transaction costs, and history in terms of the initial wealth distribution in determinig the long term wealth distribution and level of income of an economy. The possibility of the existence of cycles, and the role of lotteries and redistributive policies in archieving greater efficiency are examined.
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  • Ghatak, Maitreesh & Nien-Huei Jiang, Neville, 2002. "A simple model of inequality, occupational choice, and development," Journal of Development Economics, Elsevier, vol. 69(1), pages 205-226, October.
  • Handle: RePEc:eee:deveco:v:69:y:2002:i:1:p:205-226
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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