The name is absent

WEALTH DISTRIBUTION, INVESTMENT
INHUMANCAPITALAND
OCCUPATIONALCHOICEWHEN
CAPITALMARKETSARE IMPERFECT

R iccardaL ongaretti^α

November9, 2001

A bstract

I n oτdfer to study the long- run e≈ ects ofagents' heterogeneity we
consider overlapping generations of individuas who di^πer from one
another in wealth and ire^ ciency eve⅛l. W hen young) agents choose
whether to invest or not in human capital. Since the net return of
human capital investment is positive agents who can a^a ord such an
investment, doinvest. In thesecond period oflife, agentsmakean oc-
cupationalchoice. Theychoosetobeworkers orentrepreneurs. T here
exists acritical le^elofineC Oiencybelowwhichbeɪmingentreɔreneur
is pro..tab>le T heweath distribution and theoccupational structure
ofagents changes overtime, the formerbeing the cause and the ef-
fectofthe latter. The long run wealth distribution is stationary and
can be eitherergodic ornot, with long-run occupationalmobility or
not. W eshowhowtheeconomy's structuralparameters and thetypes
ofintergenerational transmission ofski ls a^eotthedynamiepatterns
and the long-run equilibria.

^εD ipartimentodi Econcmia P oiitica⅛ U niversità degjii Studi di M i lano- B icocca P .zza
dell'A teneoN uovo, 1 20126MILANO e-mail: riccarda.longaretti@ unimib.it

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