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Human capital Kuznets curve with subsistence consumption level

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  • Matsuo, Miki
  • Tomoda, Yasunobu

Abstract

We examine the human capital Kuznets curve in a simple model that does not assume increasing returns to scale in human capital formation. With a utility function that specifies a subsistence consumption level, consumption is a necessary good and education is a luxury good. As the children of poor households receive a low level of education, the gap in human capital endowments expands between poor and rich households. Eventually, economic development increases income and expenditure for education, and income inequality declines.

Suggested Citation

  • Matsuo, Miki & Tomoda, Yasunobu, 2012. "Human capital Kuznets curve with subsistence consumption level," Economics Letters, Elsevier, vol. 116(3), pages 392-395.
    • Handle: RePEc:eee:ecolet:v:116:y:2012:i:3:p:392-395
    DOI: 10.1016/j.econlet.2012.04.012
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    References listed on IDEAS

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    Cited by:

    1. Nadia Hanif & Noman Arshed & Osama Aziz, 2020. "On interaction of the energy: Human capital Kuznets curve? A case for technology innovation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(8), pages 7559-7586, December.
    2. Ralph Hippe & Roger Fouquet, 2015. "The human capital transition and the role of policy," GRI Working Papers 185, Grantham Research Institute on Climate Change and the Environment.
    3. Stefan Baumgärtner & Moritz A. Drupp & Martin F. Quaas, 2017. "Subsistence, Substitutability and Sustainability in Consumption," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(1), pages 47-66, May.
    4. Yu Murayama, 2022. "Human Capital Inequality with Subsistence Consumption," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2127-2137, September.
    5. Wada, Shuhei, 2021. "Online education and the Great Convergence," MPRA Paper 108793, University Library of Munich, Germany.
    6. Stefan Baumgaertner & Moritz A. Drupp & Martin F. Quaas, 2013. "Subsistence and substitutability in consumer preferences," Working Paper Series in Economics 290, University of Lüneburg, Institute of Economics.

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    More about this item

    Keywords

    Human capital; Kuznets curve; Subsistence consumption level; Luxury goods;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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