Occupational Choice, Financial Market Imperfections and Development
We develop a simple model of occupational choice under financial market im- perfections, in the presence of technological convexities. The aim is to analyze the quantitative effect of these imperfections on the level of income. We find that although their effect is relatively large, financial market imperfections alone are not able to explain the observed cross country difference in income. However, when interacted with the issue of mobility, those imperfections become much more relevant, to the point of pushing the economy into a development trap.
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| Length: | 29 pages |
| Date of creation: | Jan 2002 |
| Date of revision: | Jan 2002 |
| Handle: | RePEc:mib:wpaper:49 |
| Contact details of provider: | Postal: Piazza Ateneo Nuovo, 1 Milano 20126 Phone: +39 02 6448 3089 Fax: +39 02 6448 3085 Web page: http://dems.unimib.it Email: More information through EDIRC
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- Owen, Ann L. & Weil, David N., 1998. "Intergenerational earnings mobility, inequality and growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 71-104, February.
- Ann L. Owen & David N. Weil, 1997. "Intergenerational Earnings Mobility, Inequality, and Growth," NBER Working Papers 6070, National Bureau of Economic Research, Inc.
- Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn. Full references (including those not matched with items on IDEAS)
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