IDEAS home Printed from https://ideas.repec.org/p/wop/safiwp/95-07-061.html
   My bibliography  Save this paper

Neighborhood Feedbacks, Endogenous Stratification, and Income Inequality

Author

Listed:
  • Steven N. Durlauf

Abstract

This paper explores the evolution of the cross-section income distribution in economies where endogenous neighborhood formation interacts with positive within-neighborhood feedback effects. We study an economy in which the economic success of adults is determined by the characteristics of the families in the neighborhood in which a person grows up. These feedbacks take two forms. First, the tax base of a neighborhood affects the level of education investment in offspring. Second, the productivity of education investment with respect to offspring income is affected by a neighborhood's income distribution, reflecting factors such as role model or labor market connection effects. Conditions are developed under which endogenous stratification, defined as the tendency for families with similar incomes to choose to form common neighborhoods, will occur. Endogenous stratification can lead to pronounced intertemporal inequality as different families provide very different interaction environments for offspring. When neighborhood feedback effects are strong enough, cross-section income differences may grow across time. As a result, endogenous stratificaiton and neighborhood feedbacks can interact to produce permanent inequality.

Suggested Citation

  • Steven N. Durlauf, 1995. "Neighborhood Feedbacks, Endogenous Stratification, and Income Inequality," Working Papers 95-07-061, Santa Fe Institute.
  • Handle: RePEc:wop:safiwp:95-07-061
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. links for 2011-01-30
      by Jim in Our Word is Our Weapon on 2011-01-31 09:00:44

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Galor, Oded & Tsiddon, Daniel, 1997. "The Distribution of Human Capital and Economic Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 93-124, March.
    2. Aaronson, Daniel, 1999. "The Effect of School Finance Reform on Population Heterogeneity," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(1), pages 5-29, March.
    3. Galor, Oded & Tsiddon, Daniel, 1997. "Technological Progress, Mobility, and Economic Growth," American Economic Review, American Economic Association, vol. 87(3), pages 363-382, June.
    4. Leigh S. Tesfatsion, "undated". "An Evolutionary Trade Network Game with Preferential Partner Selection," Computing in Economics and Finance 1996 _057, Society for Computational Economics.
    5. Blackburn, Keith & Bose, Niloy, 2003. "A model of trickle-down through learning," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 445-466, January.
    6. Keith Blackburn & David Chivers, 2015. "Fearing the worst: the importance of uncertainty for inequality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 60(2), pages 345-370, October.
    7. Tesfatsion, Leigh, 1995. "How Economists Can Get Alife," Economic Reports 18196, Iowa State University, Department of Economics.
    8. Liam Aspin, 1997. "Focal Points, Preferences and the Generation of Meaning," University of East Anglia Discussion Papers in Economics _001, School of Economics, University of East Anglia, Norwich, UK..
    9. repec:wuk:eaercp:_001 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:safiwp:95-07-061. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel). General contact details of provider: http://edirc.repec.org/data/epstfus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.