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A positive theory of optimal personal income distribution and growth

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Teulings, Coen N.; Rens, Thijs van - 2002

When types of workers are imperfect substitutes, the Mincerian rate to return to human capital is negatively related to the supply of human capital. We work out a simple model for the joint evolution of output and wage dispersion. We estimate this model using cross-country panel data on GDP and...