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School Choice and the Intergenerational Poverty Trap
Author(s) -
Nishimura Kazuo,
Raut Lakshmi K.
Publication year - 2007
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2007.00411.x
Subject(s) - poverty trap , earnings , economics , investment (military) , poverty , overlapping generations model , social mobility , trap (plumbing) , function (biology) , labour economics , demographic economics , sociology , economic growth , political science , social science , accounting , engineering , evolutionary biology , environmental engineering , politics , law , biology
This paper formulates a dynamic altruistic model of parental choice of school quality and intergenerational social mobility. It shows that when there are many school qualities, the earnings of children as a function of parental schooling investment is a non‐concave function, which leads to multiple steady‐state equilibria. The paper studies the intergenerational dynamics of parental schooling investment and gives conditions on the rate of return from parental schooling investment under which some families are stuck in an intergenerational poverty trap. The policy implications are also discussed.