Higher education and the fall and rise of inequality

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dc.contributor.authorPrettner, Klausde
dc.contributor.authorSchaefer, Andreasde
dc.date.accessioned2024-04-08T08:53:34Z
dc.date.available2024-04-08T08:53:34Z
dc.date.created2016-11-03
dc.date.issued2016
dc.description.abstractWe investigate the effect of higher education on the evolution of inequality. In so doing we propose a novel overlapping generations model with three social classes: the rich, the middle class, and the poor. We show that there is an initial phase in which no social class invests in higher education of their children such that inequality is driven by bequests. Once a certain income threshold is surpassed, the rich start to invest in higher education of their children, which partially crowds out bequests and thereby reduces income inequality and inheritance flows in the short run. The better educated children of the rich, however, enjoy higher incomes such that inequality starts to rise again. As time goes by, the middle class and potentially also the poor start to invest in higher education. As the economy proceeds toward a balanced growth path, educational differences between social groups and thus inequality decline again. We argue that (1) the proposed mechanism has the potential to explain the U-shaped evolution of income inequality and inheritance flows in rich countries as well as the differential investments in higher education by richer and poorer households, (2) the currently observed increase in inequality is likely to level off in the future.de
dc.identifier.swb479360804
dc.identifier.urihttps://hohpublica.uni-hohenheim.de/handle/123456789/6089
dc.identifier.urnurn:nbn:de:bsz:100-opus-12891
dc.language.isoeng
dc.relation.ispartofseriesHohenheim discussion papers in business, economics and social sciences; 2016,19
dc.rights.licensepubl-mit-poden
dc.rights.licensepubl-mit-podde
dc.rights.urihttp://opus.uni-hohenheim.de/doku/lic_mit_pod.php
dc.subjectHigher educationen
dc.subjectInequalityen
dc.subjectGrowth regime switchen
dc.subjectMiddle income trapen
dc.subjectPiketty curveen
dc.subject.ddc330
dc.subject.gndBildungsverhaltende
dc.subject.gndSoziale Schichtungde
dc.subject.gndUngleichheitde
dc.titleHigher education and the fall and rise of inequalityde
dc.type.dcmiTextde
dc.type.diniWorkingPaperde
local.accessuneingeschränkter Zugriffen
local.accessuneingeschränkter Zugriffde
local.bibliographicCitation.publisherPlaceUniversität Hohenheimde
local.export.bibtex@techreport{Prettner2016, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6089}, author = {Prettner, Klaus and Schaefer, Andreas}, title = {Higher education and the fall and rise of inequality}, year = {2016}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }
local.export.bibtexAuthorPrettner, Klaus and Schaefer, Andreas
local.export.bibtexKeyPrettner2016
local.export.bibtexType@techreport
local.faculty.number3de
local.institute.number520de
local.opus.number1289
local.series.issueNumber2016,19
local.series.titleHohenheim discussion papers in business, economics and social sciences
local.universityUniversität Hohenheimde
local.university.facultyFaculty of Business, Economics and Social Sciencesen
local.university.facultyFakultät Wirtschafts- und Sozialwissenschaftende
local.university.instituteInstitute for Economicsen
local.university.instituteInstitut für Volkswirtschaftslehrede

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