A Simple Model of Inequality, Occupational Choice, and Development
Posted: 10 Jan 2003
We analyze a simple and tractable model of occupational choice in the presence of credit market imperfections. We examine the effect of parameters governing technology and transaction costs, and history, in terms of the initial wealth distribution, in determining the long-term wealth distribution and the level of per capita income of an economy.
Keywords: Wealth inequality, Occupational choice, Poverty traps
JEL Classification: D31, D82, O10
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