We show in this paper that greater inequality in the distribution of wealth implies lower investment in higher education levels and lower aggregate income. Liquidity constraints and indivisibility in human capital investment result in the long-run in multiple equilibria with poverty traps....

We show in this paper that GDP per-capita growth is more likely affected by the accumulation of education at the higher schooling levels in both OECD and DCs. However, in terms of the public funds allocation, this result does not prevent public education expenditures to be reallocated from...

This paper considers a two-period model of endogenous human capital formation under the credits-market imperfection and uncertainty assumptions. We compare in the first part of the paper ex-ante and ex-post general-equilibrium effects of the education subsidy policy to those of the negative...

This paper shows that, depending on the initial distribution of material wealth and that of individuals' abilities, economies converge in the long-run towards different levels of the size of the skilled workforce, and average wealth. Furthermore, unless the income tax rate is too high, the...

This paper shows that, depending on the initial distribution of material wealth and that of individuals' abilities, economies converge in the long-run towards different levels of the size of the skilled workforce, and average wealth. Furthermore, unless the income tax rate is too high, the...

This paper tests empirically the credit-constraints thesis by using cross-country data on secondary and higher-education enrolment rates. Contrary to some previous works in this direction, we find several pieces of evidence that support the importance of such a thesis. First, controlling for the...