Heterogeneous Agents, Human Capital Formation and International Income Inequality

Arbeitspapier

The paper examines the effect of heterogeneity in individual human capital formation on cross-country income inequality. It considers a two-country model of overlapping generation heterogeneous economies with the following features: (1) individuals are heterogeneous with respect to inborn ability and parental human capital; (2) intergenerational transfers take place via public investment in education financed by tax, and parental education; (3) due to variation in individual human capital, we have endogenous heterogeneity both in labor supply and in parents’ participation in self-educating their offspring. Besides exploring cross-country variation in public education, how its low level can lead to a poverty trap and how its high level can result in an increasing society’s effective human capital, we study the effects of capital markets integration, in equilibrium, on the intra-generational income inequality in both the investing and receiving countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 08-015/2

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Aggregate Factor Income Distribution ; National Government Expenditures and Education
• Subject: Heterogenous Agents ; Human Capital ; Poverty Efrap ; Income Inequality ; Humankapital ; Soziale Ungleichheit ; Armut ; Einkommensverteilung ; Zwei-Länder-Modell ; Overlapping Generations ; Theorie

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Munandar, Haris
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/86730
• Last update: 20.09.2024, 8:22 AM CEST