Even if the relatively rich and the poor are initially caught in a poverty trap, the relatively rich can escape poverty by receiving payments from the poor. Further accumulation of wealth by the rich allows the poor to escape poverty.

In this paper, we develop a model characterized by skill-biased technological change and increasing costs of education to investigate income inequality. Irregular workers cannot escape poverty by commencing investment in education because wage inequality between regular and irregular workers...

Using prefecture-level data on scholastic achievement tests in Japan, we found that parental income and education level positively affect student achievement. The effect of income on achievement is stronger for the high-scoring prefectures than for the low-scoring prefectures. The presence of...