Three papers in economic growth and inequality

Abstract

The aim of this thesis is to deepen the understanding of growth and inequality, especially the issues related the skill premium and education. I analyze the evolution of the distribution of wealth as a new channel, by affecting which exogenous shocks could affect inequality in the long run. With this mechanism, this thesis studies three perspectives of economic growth and inequality.

1, I analyze the effects of different types of technological change on the skill premium. Skill-biased and unskill-biased technological changes have different direct effects on the skill premium, while both of them reduce the skill premium in the long run by transiting the dynamic distribution of wealth into an egalitarian steady state. This result could offer some explanation for the cross-country difference of the skill premium, and for the U-shape evolution of the skill premium in the U.S., throughout the 20th century.

2, Based on the model built in the first paper, I simulate the U.S. economy as benchmark economy and examine the effects of higher education financial policies on the inequality. The model predicts that, since the U.S. economy is already an egalitarian one, offering free higher education by taxing or increasing financial aid to college could not affect inequality in the long run.

3, Furthermore, I endogenize the higher education system and find that the size of market could be an important explanation for the different structures of higher education system. This chapter also analyzes the effect of this structure on the productivity and inequality and implies that the effect on the inequality depends on the initial status of the economy.

More information

Identifiers

ORCID for Thomas Gall: orcid.org/0000-0003-2257-1405

Catalogue record

Export record