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HOW DO ELEMENTARY AND HIGHER EDUCATION AFFECT HUMAN CAPITAL ACCUMULATION AND INEQUALITY? A NOTE

Published online by Cambridge University Press:  23 November 2011

Tetsuya Nakajima
Affiliation:
Osaka City University
Hideki Nakamura*
Affiliation:
Osaka City University
*
Address correspondence to: Hideki Nakamura, Faculty of Economics, Osaka City University, 3-3-138 Sugimoto, Sumiyoshi, Osaka 558-8585, Japan; e-mail: hnakamur@econ.osaka-cu.ac.jp.

Abstract

We clarify the different effects of elementary and higher education on human capital accumulation and inequality. The productivity of elementary education plays a significant role in the widening of inequality regardless of the existence of multiple steady states. When the productivity of elementary education is low, the poor cannot afford higher education in the long run because the demand for education by the rich makes the price of education too high for the poor. However, the effect of its productivity on the attainable education level is ambiguous. A rise in the productivity of higher education always increases the education level.

Type
Notes
Copyright
Copyright © Cambridge University Press 2011

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