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Human capital, inequality, endogenous growth and educational subsidy: A theoretical analysis

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  • Chakraborty, Bidisha
  • Gupta, Manash Ranjan

Abstract

This paper develops an endogenous growth model with dualism in human capital accumulation of two types of individuals. The government imposes a proportional income tax on rich individuals and uses the tax revenue to finance the educational subsidy given to poor individuals. We find out the properties of the optimal tax financed educational subsidy policy in the semi-stationary equilibrium of the model using the technique of Stackelberg differential game.

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  • Chakraborty, Bidisha & Gupta, Manash Ranjan, 2009. "Human capital, inequality, endogenous growth and educational subsidy: A theoretical analysis," Research in Economics, Elsevier, vol. 63(2), pages 77-90, June.
    • Handle: RePEc:eee:reecon:v:63:y:2009:i:2:p:77-90
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