Dual Poverty Trap
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.
|Date of creation:||May 2006|
|Contact details of provider:|| Web page: http://www2.econ.osaka-u.ac.jp/library/global/e_HP/e_g_shiryo.html|
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- Jere R. Behrman & Mark R. Rosenzweig, 2002. "Does Increasing Women's Schooling Raise the Schooling of the Next Generation?," American Economic Review, American Economic Association, vol. 92(1), pages 323-334, March.
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- Chamley,Christophe P., 2004. "Rational Herds," Cambridge Books, Cambridge University Press, number 9780521824019, August.
- Strauss, J. & Thomas, D., 1995. "Empirical Modeling of Household and Family Decisions," Papers 95-12, RAND - Reprint Series.
- Burdett, Ken & Smith, Eric, 2002. "The low skill trap," European Economic Review, Elsevier, vol. 46(8), pages 1439-1451, September.
- Hoff, Karla & Pandey, Priyanka, 2004. "Belief systems and durable inequalities : an experimental investigation of Indian caste," Policy Research Working Paper Series 3351, The World Bank. Full references (including those not matched with items on IDEAS)
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