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Education, Wage Inequality and Growth

Author

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  • Kirill Borissov

    () (St. Petersburg Institute for Economics and Mathematics Russian Academy of Sciences - St. Petersburg Institute for Economics and Mathematics - Russian Academy of Science)

  • Stéphane Lambrecht

    () (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université Lille II - Droit et santé - Université Lille 1 - Sciences et technologies - Université Charles-de-Gaulle Lille 3 - Sciences humaines et sociales - PRES Université Lille Nord de France)

Abstract

We model a successive-generation economy in which parents, motivated by fam- ily altruism, decide to nance or not their o spring's capital accumulation on the basis of their altruistic motive, their own income and the equilibrium ratio between skilled-labor and unskilled-labor wages. The question we ask is how the growth process in this economy shapes the wage inequality and the split of the population in two classes. We study the transitional dynamics of human capital accumulation and of wage inequality. First, we prove the existence of equilibrium paths. Then we show that there exists a continuum of steady-state equilibria and prove the convergence of each equilibrium path to one of the steady-state equilibrium. Also we look at the relationship between inequality and output on the set of steady states and nd that this relationship is ambigu- ous. Finally, we deal with an endogenous-growth version of our model, which displays the ambiguous relationship between inequality and the rate of growth

Suggested Citation

  • Kirill Borissov & Stéphane Lambrecht, 2011. "Education, Wage Inequality and Growth," Working Papers hal-00955684, HAL.
  • Handle: RePEc:hal:wpaper:hal-00955684 Note: View the original document on HAL open archive server: http://hal.univ-lille3.fr/hal-00955684
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    References listed on IDEAS

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    1. Bertola, Giuseppe, 1993. "Factor Shares and Savings in Endogenous Growth," American Economic Review, American Economic Association, pages 1184-1198.
    2. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, pages 1243-1284.
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    6. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    7. Kirill Borissov & Stéphane Lambrecht, 2009. "Growth and distribution in an AK-model with endogenous impatience," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 93-112.
    8. Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 465-486, August.
    9. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, pages 465-490.
    10. Pascal Petit, 1999. "Les aléas de la croissance dans une économie fondée sur le savoir," Revue d'Économie Industrielle, Programme National Persée, vol. 88(1), pages 41-66.
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    13. Bertola, Giuseppe, 1993. "Factor Shares and Savings in Endogenous Growth," American Economic Review, American Economic Association, pages 1184-1198.
    14. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    15. Philippe Aghion & Mathias Dewatripont & Caroline Hoxby & Andreu Mas-Colell & André Sapir, 2010. "The governance and performance of universities: evidence from Europe and the US," Economic Policy, CEPR;CES;MSH, pages 7-59.
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    18. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, pages 1615-1660.
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    Cited by:

    1. Kirill Borissov & Thierry Brechet & Stephane Lambrecht, 2012. "Environmental maintenance in a dynamic model with heterogenous agents," CEEES Paper Series CE3S-02/12, European University at St. Petersburg, Department of Economics.
    2. Jackie Krafft & Francesco Quatraro & Pier Paolo Saviotti, 2014. "The Dynamics of Knowledge-intensive Sectors' Knowledge Base: Evidence from Biotechnology and Telecommunications," Industry and Innovation, Taylor & Francis Journals, vol. 21(3), pages 215-242, April.
    3. BALESTRA, Carlotta & BRECHET, Thierry & LAMBRECHT, Stéphane, 2010. "Property rights with biological spillovers: when Hardin meets Meade," CORE Discussion Papers 2010071, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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