Occupational Choice, Wealth Distribution and Development
This paper develops a model of occupational choice and income distribution in which both the wage rate and the interest rate are determined endogenously. We show the existence of multiple equilibria that depend on the initial distribution. In particular there can be a "development trap" characterized by many poor workers earning low wages and few rich entrepreneurs that exploit the low wage level and the high interest rate.
Year of publication: |
1999-09
|
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Authors: | Colombo, Emilio ; Valentinyi, Akos |
Institutions: | Dipartimento di Economia, Metodi Quantitativi e Strategie d'Impresa (DEMS), Facoltà di Economia |
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