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Occupational Diversity and Endogenous Inequality Dilip Mookherjee
| Content Provider | Semantic Scholar |
|---|---|
| Author | Ray, Debraj |
| Copyright Year | 2004 |
| Abstract | This paper constructs a theory of equilibrium investment allocation between human capital and financial assets in the presence of borrowing constraints, and resulting implications for the dynamics of distribution of income and wealth. The theory generalizes most existing models of occupational choice, including Becker-Tomes-Loury models in which markets are inherently equalizing, endogenous inequality models where they are inherently disequalizing, and ‘new classical’ models in which either can happen depending on historical conditions. Which view turns out to be correct is shown to depend on two attributes of occupational diversity: the range of training cost differentials between least skilled and most skilled occupations, and the richness of occupational structure which affects the divisibility of human capital investment opportunities. We thank participants at the MacArthur Inequality network meetings in October 2004 for helpful comments. Mookherjee thanks the MacArthur Foundation for research funding, and Ray the National Science Foundation. Ray is also grateful to the London School of Economics for warm hospitality during a sabbatical year. Address correspondence to dilipm@bu.edu and debraj.ray@nyu.edu. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.bu.edu/econ/workingpapers/papers/Dilip%20Mookherjee/04span12.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
