TY - JOUR
T1 - Equity and Efficiency in Human Capital Investment
T2 - The Local Connection
AU - Bénabou, Roland
N1 - Funding Information:
therefore negligible compared to the gains Sen) - (S(x1) +S(x2)j2 which are of second order in Mr, as shown by the expression (13) giving SIt. II Acknowledgements. I am grateful for the helpful comments of Olivier Blanchard, Patrick Bolton, Peter Diamond, Dick Eckaus, Jonathan Gruber, Michael Kremer, Glenn Loury, Julio Rotemberg, Richard Romano, Richard Startz and Jean Tirole. I also thank Ian Jewitt and two referees for useful suggestions. Financial support from the NSF (SES92-09267) is gratefully acknowledged.
PY - 1996
Y1 - 1996
N2 - A general model of community formation and human capital accumulation with social spillovers and decentralized school funding is used to analyse the causes of economic segregation and its consequences for equity and efficiency. Significant polarization arises from minor differences in endowments, preferences or access to capital markets. This makes income inequality more persistent across generations, but the same need not be true for wealth. Equilibrium stratification tends to be excessive, resulting in low aggregate surplus. Whether state equalization of school resources can remedy these problems hinges on how purchased, social and family inputs interact in education and in mobility decisions.
AB - A general model of community formation and human capital accumulation with social spillovers and decentralized school funding is used to analyse the causes of economic segregation and its consequences for equity and efficiency. Significant polarization arises from minor differences in endowments, preferences or access to capital markets. This makes income inequality more persistent across generations, but the same need not be true for wealth. Equilibrium stratification tends to be excessive, resulting in low aggregate surplus. Whether state equalization of school resources can remedy these problems hinges on how purchased, social and family inputs interact in education and in mobility decisions.
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U2 - 10.2307/2297851
DO - 10.2307/2297851
M3 - Article
AN - SCOPUS:0000473191
SN - 0034-6527
VL - 63
SP - 237
EP - 264
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 2
ER -