Human Capital Accumulation and Income Distribution

29 Pages Posted: 26 May 2004 Last revised: 2 Jun 2021

See all articles by Raquel Fernández

Raquel Fernández

New York University - Leonard N. Stern School of Business, Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Richard Rogerson

Arizona State University (ASU) - Economics Department; National Bureau of Economic Research (NBER); Princeton University - Princeton School of Public and International Affairs

Date Written: February 1992

Abstract

The non-existence of credit markets implies that initial income is a determinant of who actually obtains an education. We consider the outcome of a process in which income is taxed to provide subsidies for education. and taxes are chosen by majority voting. We characterize the outcome as a function of both the level and the distribution of income in the economy. In particular we derive conditions under which middle income individuals ally themselves with upper income individuals at the expense of lower income individuals, and vice versa. The analysis determines the relationship between human capital accumulation and distribution of income.

Suggested Citation

Fernández, Raquel and Rogerson, Richard, Human Capital Accumulation and Income Distribution (February 1992). NBER Working Paper No. w3994, Available at SSRN: https://ssrn.com/abstract=256909

Raquel Fernández (Contact Author)

New York University - Leonard N. Stern School of Business, Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

National Bureau of Economic Research (NBER)

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Richard Rogerson

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States
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National Bureau of Economic Research (NBER)

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United States

Princeton University - Princeton School of Public and International Affairs ( email )

Princeton University
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United States

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