Persistent inequality, Kuznets curve, and evolution of study effort in human capital model

This study aims to investigate the conditions for persistent inequality, generate the Kuznets curve, and examine the evolution of study effort in a human capital OLG model, which is a similar framework to that of Glomm and Ravikumar(1998). We revisit the conditions using a more generalized utility function and human capital production function. In our model, human capital requires both educational investment and study effort, the utility function is non-homothetic, and educational investment is a luxury good.We show that income inequality can persist and that the Kuznets curve is generated despite non-increasing returns to scale production function. Moreover, the relationship between study effort and educational investment is not monotonic