P rogenitors are distributed as in T able 1 accordingtoeducation and oc-
cupation.
|
N Q . |
Q |
marg. distr. | |
|
W |
h (1 i °e;ng) |
(1 i h)(1 i °eq) |
1 i (1 i h) °e,g i h°eng |
|
E ~~ |
h°eng |
(1 i h) °⅛g |
h°eng + (1 i h) °e,g |
|
marg, distr. |
h ~ |
1 i h |
1 ^ |
T able 1: progenitors’ occupational distribution.
3 DYNAMICS...
T he Ong- run e≈ ects of inequality depend on the hypothesis about the in-
tergencraιtιonal transmission Cftechnical inetdency In particular; ifthe
transmission ofentrepreneurialability is due only to genetics (i.e. itis un-
cP ected by stochastic shocks), dynamics are determined exclusively by each
progenitors characteristics (wealth and technical ineCdency), the long- run
distribution ofwealth is strictly dependent on initial conditions and there
Cxistmultiple equi libria. O n the other hand, iftechnical ineC dency has a
stochasticcomponentthe dynamics ofaccumulation ofwealth are a M arkov
P rocess. The lowerthe genetics, the higherthe probability, foreach genera-
tion, toconverge to any steady state. The long-run distribution is ergodic.
Each panel of...cu∣re1 sketches the accumulation fUncticns fcreach kind
ofprogenitor': non-cuaii..edworker∙; cμaii..edworker∙; non-c∣uali...edent∣∙epre-
neur, quali.ed entrepreneur.
G iven preferences and human capitalinvestment, the lawofmotion ofa
non-cuali.ed worker’s wealth is:
bt+ι = (1 i °) (ibt+ w) τtb2 2<(0,h) 1 (5)
°e;nq < °t 1
The lawofmotion ofa cuali.ed worker’s wealth is instead:
bt 2 (h, x)
'e,g < °t ∙ 1
bt+ι = (1 i °) [i (bt i h) + w + ±h]
Iftheprogenitoris anon-cuali.edentrepreneur, thedynastyaccumulates
wealth accordingtothe followingecuation:
10