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Education And Family Income: Can Poor Children Signal Their Talent?

Author

Listed:
  • Gonzalo Olcina Vauteren

    (Universitat de València)

  • Luisa Escriche

    (Universitat de València)

Abstract

The aim of this paper is to explain how financial constraints and family background characteristics affect the signalling educational investments of individuals born in low-income families. We show that talented students who are poor are unable to signal their talent, as the maximum level of education they can attain may also be achieved by less talented students who are rich. Under this approach, a de-crease in inequalities across generations cannot be expected. The paper also shows that an increase in educational standards would help poor individuals with high-ability if it is combined with other non-monetary measures.

Suggested Citation

  • Gonzalo Olcina Vauteren & Luisa Escriche, 2006. "Education And Family Income: Can Poor Children Signal Their Talent?," Working Papers. Serie AD 2006-20, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2006-20
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2006-20.pdf
    File Function: Fisrt version / Primera version, 2006
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    References listed on IDEAS

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    Cited by:

    1. Stefano STAFFOLANI & Maria Cristina RECCHIONI, 2016. "Increasing Graduation and Calling for More Autonomy in Higher Education: Is It a Good Thing? A Theoretical Model," Working Papers 419, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

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    More about this item

    Keywords

    Market selection hypothesis; General Equilibrium with Incomplete markets; Wealth accumulation;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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