This paper examines how economic stratification affects inequality and growth over time. It studies economies where heterogenous agents interact through local public goods or externalities (school funding, neighbourhood effects) and economy-wide linkages (complementary skills, knowledge...

We argue that a sensible measure of the aggregate value of human capital is the ratio of total labour income per capita to the wage of a person with zero years of schooling. The reason is that total labour income not only incorporates human capital, but also physical capital: given human...

The distribution of human capital and income lies at the center of a nexus of forces that shape a country’s economic, institutional and technological structure. I develop here a unified model to analyse these interactions and their growth consequences. Five main issues are addressed. First, I...

This paper develops a simple model of human capital accumulation and community formation by heterogeneous families, which provides an integrated framework for analysing the local determinants of inequality and growth. Five main conclusions emerge. First, minor differences in education...

We construct a set of human capital indexes for the states of the United States for each Census year starting in 1940. To do so we propose a new methodology for the construction of index numbers in panel data sets. Our method is based on an optimal approach by which we choose the `best' set...