We examine the determinants of income mobility and inequality in a Ramsey model with elastic labor supply and heterogeneous wealth and ability (labor endowment). Both agents with lower wealth and with greater ability tend to supply more labor, implying that labor supply decisions may have an...

This report sheds light on the extent to which earnings mobility and inequality of opportunity in access to the labor market have contributed to the increase in earnings inequality in Mauritius. Among the most important concerns about rising inequality is a situation where people become trapped...

We construct a model where wage inequality, intergenerational mobility and the distribution of skills are all jointly determined in general equilibrium, which is solved analytically. We show that it is important to treat these variables jointly, as they have a significant effect on each other....