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Education and the poverty trap

Author

Listed:
  • BARHAM, Vicky

    (Queen’s University)

  • BOADWAY, Robin

    (Queen’s University)

  • MARCHAND, Maurice

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium and Université de Li!ège)

  • PESTIEAU, Pierre

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium and Université de Li!ège)

Abstract

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.

Suggested Citation

  • BARHAM, Vicky & BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU, Pierre, 1992. "Education and the poverty trap," LIDAM Discussion Papers CORE 1992010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1992010
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L68 - Industrial Organization - - Industry Studies: Manufacturing - - - Appliances; Furniture; Other Consumer Durables

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