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Sorting and Long-Run Inequality

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  • Rogerson, Richard
  • Fernández, Raquel

Abstract

Many social commentators have raised concerns over the possibility that increased sorting in a society can lead to greater inequality. To investigate this we construct a dynamic model of intergenerational education acquisition, fertility, and marital sorting and parameterize the steady state to match several basic empirical findings. Contrary to Kremer's (1997) finding of a basically insignificant effect of marital sorting on inequality, we find that increased marital sorting will significantly increase income inequality. Three factors are central to our findings: a negative correlation between fertility and education, a decreasing marginal effect of parental education on children's years of education, and wages that are sensitive to the relative supply of skilled workers.

Suggested Citation

  • Rogerson, Richard & Fernández, Raquel, 2000. "Sorting and Long-Run Inequality," CEPR Discussion Papers 2352, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2352
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    More about this item

    Keywords

    Fertility; Inequality; Marriage; Sorting;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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