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A model of economic development with lumpy human capital accumulation

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  • Aubhik Khan

    (Federal Reserve Bank of Philadelphia)

Abstract

At the household level, the model predicts very low rates of savings for poor households, and high level of intergenerational persistence in both wealth and education. Poverty is persistent across generations as poor households are unable to undertake the large investments in education that are necessary to move their children into the skilled labour force.

Suggested Citation

  • Aubhik Khan, 2008. "A model of economic development with lumpy human capital accumulation," 2008 Meeting Papers 943, Society for Economic Dynamics.
    • Handle: RePEc:red:sed008:943
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    References listed on IDEAS

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    1. Andrés Erosa & Tatyana Koreshkova & Diego Restuccia, 2010. "How Important Is Human Capital? A Quantitative Theory Assessment of World Income Inequality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1421-1449.
    2. Francisco J. Buera & Yongseok Shin, 2013. "Financial Frictions and the Persistence of History: A Quantitative Exploration," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 221-272.
    3. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    4. Aubhik Khan & Julia K. Thomas, 2008. "Idiosyncratic Shocks and the Role of Nonconvexities in Plant and Aggregate Investment Dynamics," Econometrica, Econometric Society, vol. 76(2), pages 395-436, March.
    5. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 35-52.
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