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Human Capital Inequality, Life Expectancy and Economic Growth

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  • Amparo Castello-Climent

    (International Economics Institute, University of Valencia)

  • Rafael Domenech

    (International Economics Institute, University of Valencia)

Abstract

This paper presents a model in which inequality affects per capita income when individuals decide to invest in education taking into account their life expectancy, which depends to a large extent on the human capital of their parents. Our results show the existence of multiple steady states depending on the initial distribution of education. The low steady state is a poverty trap in which children raised in poor families have low life expectancy and work as non-educated workers. The empirical evidence suggests that the life expectancy mechanism explains a major part of the relationship between inequality and human capital accumulation.

Suggested Citation

  • Amparo Castello-Climent & Rafael Domenech, 2006. "Human Capital Inequality, Life Expectancy and Economic Growth," Working Papers 0604, International Economics Institute, University of Valencia.
  • Handle: RePEc:iei:wpaper:0604
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    References listed on IDEAS

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    More about this item

    Keywords

    Life expectancy; human capital; inequality.;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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