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Quality of Education, Productivity Changes, and Income Distribution

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  • Mehta, Shailendra Raj

Abstract

A general equilibrium model of a dual economy is constructed with workers and managers and hierarchical production. Ability is continuous, and there is perfect competition in the product market. Higher quality of education is treated as a form of technical progress. An equilibrium wage profile is derived. Different kinds of technical and productivity changes yield different gainers and losers. Declines in the quality of education generally lead to an increase in inequality. Surprisingly, groups suffering from declines in quality of education often benefit at the costs of others. Parallels are drawn with recent experience. Copyright 2000 by University of Chicago Press.

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  • Mehta, Shailendra Raj, 2000. "Quality of Education, Productivity Changes, and Income Distribution," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 252-281, April.
    • Handle: RePEc:ucp:jlabec:v:18:y:2000:i:2:p:252-81
    DOI: 10.1086/209958
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    References listed on IDEAS

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