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Minoru Watanabe and Masaya Yasuoka |
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''Income growth, inequality and preference for education investment: a note'' |
( 2009, Vol. 29 No.4 ) |
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Based on Glomm and Ravikumar (1992), this paper described the relation between preferences for educational investment for children and
income growth or income inequality. The result derived using the constant relative risk aversion (CRRA) utility function differs from
that derived using the log utility function. With the CRRA utility function, even if human capital is produced using constant returns to scale
inputted by educational investment and parental human capital, the income converges to the steady state and income inequality vanishes
in the long run, which is not derived by the log utility function.
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Keywords: Educational investment, Income growth, Income inequality
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JEL: I2 - Education: General O1 - Economic Development: General |
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Manuscript Received : Nov 26 2009 | | Manuscript Accepted : Dec 09 2009 |
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