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Wages of regular and irregular workers, the price of education, and income inequality

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  • Hideki Nakamura

Abstract

In this paper, we develop a model characterized by skill-biased technological change and increasing costs of education to investigate income inequality. Irregular workers cannot escape poverty by commencing investment in education because wage inequality between regular and irregular workers widens and the price of education increases with the average level of education. Moreover, if the productivity of elementary education is low relative to that of higher education, middle-income individuals are eventually unable to pursue higher education because the threshold for education expenditure rises with the price of education. Thus, income inequality may widen, even among regular workers. Copyright Springer Science+Business Media New York 2013

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  • Hideki Nakamura, 2013. "Wages of regular and irregular workers, the price of education, and income inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(4), pages 517-533, December.
    • Handle: RePEc:kap:jecinq:v:11:y:2013:i:4:p:517-533
    DOI: 10.1007/s10888-012-9232-5
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    Cited by:

    1. Masashi Tanaka, 2020. "Human capital investment, credentialing, and wage differentials," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(4), pages 992-1016, August.
    2. Merna Mohamed Esmat Hefnawi & Hebatallah Ghoneim, 2020. "Human Capital and Economic Growth in Egypt," Proceedings of Business and Management Conferences 10112451, International Institute of Social and Economic Sciences.
    3. Nakamura, Hideki, 2015. "Which education policies can prevent the collapse of the middle-income group?," Japan and the World Economy, Elsevier, vol. 36(C), pages 1-10.
    4. Masashi Tanaka, 2013. "Human Capital Investment, Credentialing, and Wage Differentials," Discussion Papers in Economics and Business 13-31-Rev., Osaka University, Graduate School of Economics, revised Aug 2017.

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    More about this item

    Keywords

    Regular and irregular workers; Skill-biased technological change; Price of education; Income inequality; I20; O11; O15; O30;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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