Education and the poverty trap
An overlapping generations model is constructed in which individual wealth is related to educational attainment, and in which liquidity constraints my induce children to invest in a sub-optimal level of education given their ability. Borrowing for educational attainment is obtained from within the family. Abilities differ among children and may be related to parental ability. Stationary state equilibria are found to exist in which children of poorer families are caught in a poverty trap because of an inability of finance their education. The role of redistributive policy is studied in this context.
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- Gary S. Becker & Kevin M. Murphy, .
"The Family and the State,"
University of Chicago - Population Research Center
87-15, Chicago - Population Research Center.
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"Is Everything Neutral?,"
Journal of Political Economy,
University of Chicago Press, vol. 96(2), pages 308-38, April.
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"Child Endowments, and the Quantity and Quality of Children,"
NBER Working Papers
0123, National Bureau of Economic Research, Inc.
- Becker, Gary S & Tomes, Nigel, 1976. "Child Endowments and the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S143-62, August.
- Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
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