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Dual Poverty Trap

Author

Listed:
  • Ryo Horii

    (Graduate School of Economics, Osaka University)

  • Masaru Sasaki

    (Graduate School of Economics, Osaka University)

Abstract

This paper constructs an overlapping generations model of search equilibrium that analyzes intergenerational and coordination traps simultaneously. When parents are uneducated, their children often face difficulty in finishing school, and therefore likely to remain uneducated. In addition, if children expect that other children of the same generation do not receive education, they anticipate that firms will not create enough jobs for educated and thus are discouraged from schooling. These two mechanisms of poverty trap reinforce each other-creating a dual poverty trap. Escaping from the trap requires a combined, not separate, implementation of financial assistance for schooling and policies for changing agents f expectation.

Suggested Citation

  • Ryo Horii & Masaru Sasaki, 2006. "Dual Poverty Trap," Discussion Papers in Economics and Business 06-12, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0612
    as

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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0612.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    overlapping generations model; education; intergenerational externality; job search.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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