Intergenerational Earnings Mobility, Inequality, and Growth

57 Pages Posted: 9 Jun 2000 Last revised: 6 Oct 2010

See all articles by Ann L. Owen

Ann L. Owen

Hamilton College - Economics Department

David N. Weil

Brown University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 1997

Abstract

We examine a model in which per capita income, inequality, intergenerational mobility, and returns to education are all determined endogenously. Individuals earn wages depending on their ability, which is a random variable. They purchase an education with transfers received from their parents, and are subject to liquidity constraints. In the model, multiple steady state equilibria are possible: countries with identical tastes and technologies can reach differing rates of mobility, inequality, and per capita income. Equilibria with higher levels of output also have lower inequality, higher mobility, and more efficient distribution of education.

Suggested Citation

Owen, Ann L. and Weil, David Nathan, Intergenerational Earnings Mobility, Inequality, and Growth (June 1997). NBER Working Paper No. w6070. Available at SSRN: https://ssrn.com/abstract=226480

Ann L. Owen

Hamilton College - Economics Department ( email )

198 College Hill Road
Clinton, NY 13323
United States
315-859-4419 (Phone)
303-859-4477 (Fax)

David Nathan Weil (Contact Author)

Brown University - Department of Economics ( email )

Box B
Providence, RI 02912
United States
401-863-1754 (Phone)
401-863-1970 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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