Working Paper: NBER ID: w10890
Authors: Isaac Ehrlich; Jinyoung Kim
Abstract: Using an endogenous-growth, overlapping-generations framework where human capital is the engine of growth, we trace the dynamic evolution of income and fertility distributions and their interdependencies over three endogenous phases of economic development. In our model, heterogeneous families determine fertility and children's human capital, and generations are linked via parental altruism and social interactions. We derive and test discriminating propositions concerning the dynamic behavior of inequalities in fertility, educational attainments, and three endogenous income inequality measures -- family-income inequality, income-group inequality, and the Gini coefficient. In this context, we also reexamine the "Kuznets hypothesis" concerning the relation between income growth and inequality.
Keywords: Income Inequality; Fertility Inequality; Human Capital; Economic Development; Kuznets Hypothesis
JEL Codes: D31; J1; O1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income growth (O49) | income inequality (D31) |
| fertility choices (J13) | income inequality (D31) |
| population shares of different income groups (D31) | income inequality (D31) |
| heterogeneities in family endowments (J12) | income inequality (D31) |
| social interactions among families (J12) | income inequality (D31) |
| correlation of heterogeneity sources (C10) | income inequality (D31) |