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Inequality, Growth, and the Dynamics of Social Segmentation
Author(s) -
KEMPF HUBERT,
MOIZEAU FABIEN
Publication year - 2009
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2009.01420.x
Subject(s) - economics , inequality , externality , partition (number theory) , segmentation , dynamics (music) , growth model , microeconomics , social inequality , econometrics , economic geography , mathematical economics , mathematics , computer science , sociology , mathematical analysis , pedagogy , combinatorics , artificial intelligence
In this paper, we investigate the link between the dynamics of society segmentation into communities and the growth process, based on a simple human capital growth model. Using coalition theory, we study the socioeconomic dynamics of an economy over time, characterize it and prove that the economy converges to a steady state partition that may be segmented. Eventually the whole economy tends to a balanced growth path, exhibiting persistent inequality in the case of segmentation. We then provide sufficient conditions on initial inequality and the technology parameters generating local and global externalities for obtaining a segmented society in the long run. On the whole, the relationship between inequality and growth cannot be assessed without taking into consideration the stratification phenomena at work in society over time.