Working Paper: CEPR ID: DP18474
Authors: Mark Gradstein; Luigi Ventura
Abstract: We introduce into a human-capital based growth framework utility from self-esteem, driven by academic achievements. Self-esteem, through its effect on human capital, is shown to shape the intertemporal evolution and the persistence of income inequality, in general, and across population groups. Inequality persistence is obtained because of the wedge that the self-esteem component creates between households whose academic achievements are high enough as opposed to those whose achievements are insufficiently low. Among the several extensions, it is shown that controlling parenting style can exacerbate income inequality while reducing children’s self-esteem.
Keywords: Cultural traits; Self-esteem; Growth; Persistent inequality
JEL Codes: D31; J15; J24; O11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| self-esteem (I31) | educational outcomes (I26) |
| educational outcomes (I26) | income inequality (D31) |
| self-esteem (I31) | income inequality (D31) |
| parenting practices (J13) | self-esteem (I31) |
| parenting practices (J13) | income inequality (D31) |
| low academic achievements (I24) | self-esteem (I31) |
| self-esteem (I31) | educational attainment (I21) |