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Title:Unequal opportunities and human capital formation PDF Logo
Authors:Mejίa, Daniel
St-Pierre, Marc
Issue Date:2005
Series/Report no.:CESifo working papers 1383
Abstract:This paper develops a tractable, heterogeneous agents general equilibrium model where individuals have different endowments of the factors that complement the schooling process. The paper explores the relationship between inequality of opportunities, inequality of outcomes, and efficiency in human capital formation. Using numerical solutions we study how the endogenous variables of the model respond to two different interventions in the distribution of opportunities: a mean-preserving spread and a change in the support. The results suggest that a higher degree of inequality of opportunities is associated with lower average level of human capital, a lower fraction of individuals investing in human capital, higher inequality in the distribution of human capital, and higher wage inequality. In other words, the model does not predict a trade-off between efficiency and equality of opportunity in human capital formation.
Subjects:human capital
inequality
equity-efficiency trade-off
JEL:J31
J24
D33
O15
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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