Human capital, study effort, and persistent income inequality
Document Type
Journal article
Source Publication
Review of Development Economics
Publication Date
6-1-2003
Volume
7
Issue
2
First Page
311
Last Page
326
Abstract
The paper shows that if an individual's cost of human capital accumulation depends on his parents' human capital and there exists a "raw labor" sector of production, individuals with low parental human capital may devote little effort in study and become unskilled workers. Further, if an individual exerts little effort in study, the human capital he accumulated may be even less than his parents'. Consequently, his children will have even lower parental human capital than him and they will therefore also become unskilled. Thus, the model shows that even when education is free, income inequality can persist across generations.
DOI
10.1111/1467-9361.00193
Print ISSN
13636669
E-ISSN
14679361
Publisher Statement
Copyright © Blackwell Publishing Ltd 2003
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Fan, C. S. (2003). Human capital, study effort, and persistent income inequality. Review of Development Economics, 7(2), 311-326. doi: 10.1111/1467-9361.00193