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Aspirations, Segregation and Occupational Choice

  • Dilip Mookherjee


    (Boston University)

  • Stefan Napel

    (University of Bayreuth)

  • Debraj Ray

    (New York University)

This paper examines steady states of an overlapping generations economy with a given distribution of household locations over a one-dimensional interval. Parents decide whether or not to educate their children. Such decisions are a ected by location: parental aspirations depend on the earnings of their neighbors. At the same time, economy-wide wages endogenously adjust to bring factor supplies into line with demand. The model therefore combines local social interaction with global market interaction. The paper studies steadystate configurations of skill acquisition, both with and without segregation, and studies the macroeconomic and welfare effects of segregation on aggregate economic outcomes.

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Paper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - The Institute for Economic Development Working Papers Series with number dp-182.

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Length: 28
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:bos:iedwpr:dp-182
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  1. Dilip Mookherjee & Stefan Napel & Debraj Ray, 2010. "Aspirations, Segregation, and Occupational Choice," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 139-168, 03.
  2. Christian Ghiglino & Sanjeev Goyal, 2008. "Keeping up with the neighbours: social interaction in a market economy," Economics Discussion Papers 655, University of Essex, Department of Economics.
  3. Dilip Mokherjee & Stefan Napel, 2006. "Intergenerational Mobility and Macroeconomic History Dependence," Discussion Papers 1, Aboa Centre for Economics.
  4. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
  5. Pancs, Romans & Vriend, Nicolaas J., 2007. "Schelling's spatial proximity model of segregation revisited," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 1-24, February.
  6. Napel, Stefan & Schneider, Andrea, 2006. "Intergenerational talent transmission, inequality, and social mobility," Working Paper 52/2006, Helmut Schmidt University, Hamburg.
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