the progenitors, the higherthe long-run share ofthe population trapped
in povertyand in nonτ-qμalι...crtιon;;
2 a reduction in Ihecostofeducatiori, ceteris paribus> impiies an increase
i n ∈qμi ty and i n aggregate ∈¢ dency al owing the whɔe population to
qualify and implying an increase in the mean wealth and in aggregate
utility. In thatcase the long-run distribution does notdependon initial
conditions;
2 ceteris paribus the mcste3 Qentcynasties would be worse op cUe to
thereduction in thecostofeducationi whichmeans adecreasein human
capitaland a decrease in quali.ed people’s income.
M ultipeec∣ui Hbriaresultingfrom the...rstsG≡narioarethesaιτιeasG abr
andZ eira's andO wɪm andW eH lss andean interpretdinerentcros&countries
cynιaτics in the distribution efineoτe and wealth. I n fact diπ erent cross-
country performances may be explained by diπ erent initial conditions. A
country characterized by a more equal distribution and a higher level of
average wealth may take of and converge to a high long run equi iibrium,
whereas acountrywith averyunequaldistribution and alowlevelofaverage
wealth would inevitably be trapped in poverty and non-quali.cation.
As faras scenarioIII is concerned, descendants from non-quali.ed work-
ers and entrepreneurs remain in the progenitors' educational and occupa-
tional categories. O nly quali.ed entrepreneurs characterized by technical
in∈C dency lower than e = (1 + h) ∣ ix(1—°)+h remain in this category En-
q q q 1 qK (1—°)
treɔreneurs with a degree ofineXaency such thate <° ∙ °eq decumulate
wealth and cannotaf ord education anymore in the long-run, becomingnon-
quali.ed workers. D ynasties descending from quali.ed workers experience
only downward mobility as faras education is concerned.
The long-run occupationaldistribution is summarized in T able 5.
N Q |
Q |
marg, distr. | ||
W |
0:69 ! |
0:73 |
0:01238 ! 0 |
0:70238 ! 0:73 |
E |
0:21 ! |
0:21 |
0:08762 ! 0:06 |
0:29762 ! 0.27 |
marg. distr. |
0:9 ! |
0:94 |
0 :1 ! 0 :06 |
1 |
G IN I = |
0:263 ! |
0:332 |
T able 5: evolution of occupational distribution in scenario II I (progenitors !long-run) .
19
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