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Inequality And Growth: Non-Monotonic Effects Via Education And Fertility

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  • Akihito Asana

Abstract

This paper examines the effect of inequality upon economic growth. Much of the existing empirical literature has found a negative effect of inequality upon long run growth. In contrast, our theoretical model, in which heterogeneous individuals jointly determine the levels of investment in human capital and fertility, predicts that the effect of inequality upon growth is non-monotonic: inequality impedes growth in low fertility economies, but fosters growth in high fertility economies. We provide empirical support for this prediction by estimating a system of equations to which growth, investment in human capital, and fertility are endogenous.

Suggested Citation

  • Akihito Asana, 2002. "Inequality And Growth: Non-Monotonic Effects Via Education And Fertility," Department of Economics - Working Papers Series 841, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:841
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    File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-02/841.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Growth; Inequality; Human Capital; Fertility;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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