Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147421
Authors: 
Strulik, Holger
Year of Publication: 
2016
Series/Report no.: 
Discussion Papers, Center for European, Governance and Economic Development Research 294
Abstract: 
In this paper, I explore in an overlapping generations framework, a mechanism motivating a neurobiological poverty trap. Poverty causes stress and depression in individuals susceptible to depression. Poor and depressed individuals discount the future at a higher rate and invest less in the human capital of their children than mentally healthy or rich individuals. This gene-environment interaction generates a vicious cycle in which poor individuals inherit not only susceptibility to depression but also stress and poverty. I show that a successful one-time intervention has the power to permanently eliminate the neurobiological poverty trap.
Subjects: 
child investment
development
depression
discounting
intergenerational transmission
gene-environment interaction
JEL: 
O12
O15
D10
D91
I15
I25
I30
Document Type: 
Working Paper

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