Education and the Poverty Trap
(1995) European Economic Review — Vol. 39, n° 7, p. 1257-1275 (1995)
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- Abstract
- An overlapping generations model is constructed in which individual wealth is related to educational attainment, and in which liquidity constraints may induce children to invest in a sub-optimal level of education given their ability. Financing for education is obtained from within the family. Abilities differ among children and may be related to parental ability. Stationary state equilibria are found to exist in which children of poorer families are caught in a poverty trap because of an inability to finance their education. The role of redistributive policy is studied in this context.
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Citations
Barham, V., Boadway, R., Marchand, M., & Pestieau, P. (1995). Education and the Poverty Trap. European Economic Review, 39(7), 1257-1275. https://doi.org/10.1016/0014-2921(94)00040-7 (Original work published 1995)