Title

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

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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