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Minoru Watanabe and Masaya Yasuoka
''Income growth, inequality and preference for education investment: a note''
( 2009, Vol. 29 No.4 )
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.
Keywords: Educational investment, Income growth, Income inequality
JEL: I2 - Education: General
O1 - Economic Development: General
Manuscript Received : Nov 26 2009 Manuscript Accepted : Dec 09 2009

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