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Community structure and labour market segmentation in a stochastic model of

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  • Davide Fiaschi - Matteo Marsili

Abstract

We analyse an economy where heterogeneous agents are partitioned in communities and individual human capital accumulation, the source of growth, is the joint result of private investment in education, public expenditure and externalities within a community. We characterize the long-run growth rate and the distribution of human capital under alternative specifications regarding community structure, the method to finance public expenditure and labour market. The maximum growth rate is reached for a full integrated economy (just one community). In a stratified economy public expenditure financed by government is preferred to locally financed education. The segmentation of labour market has a negative effect on aggregate growth by decreasing the resources devoted to education

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  • Davide Fiaschi - Matteo Marsili, 2004. "Community structure and labour market segmentation in a stochastic model of," Computing in Economics and Finance 2004 239, Society for Computational Economics.
    • Handle: RePEc:sce:scecf4:239
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    References listed on IDEAS

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    More about this item

    Keywords

    social interactions; human capital; neighbourhood effects; segmented labour market; taxation;
    All these keywords.

    JEL classification:

    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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