This paper introduces endogenous fertility into a model of occupational choice, and studies its steady states. Three main results are obtained. First, despite the presence of both income and substitution eects in fertility choice, general equilibrium eects operating via endogenous wages in...

When human capital accumulation generates pecuniary externalities across professions, and capital markets are imperfect, persistent inequality in utility and consumption is inevitable in any steady state. This is true irrespective of the degree of divisibility in investments. However,...

We compare the long-run eects of replacing unconditional transfers to the poor by transfers conditional on the education of children. Unlike the Mirrlees income taxation model, the distribution of skill evolves endogenously. Human capital accumulation follows the...

A traditional view of markets is that they equalize wealth across individuals. A more recent literature suggests that markets are inherently disequalizing. A third viewpoint argues that initial history is crucial in determining whether inequalities persist or not. By constructing a theory of...

This paper examines steady states of an overlapping generations economy with a given distribution of household locations over a one-dimensional interval. Parents decide whether or not to educate their children. Such decisions are aected by location: parental aspirations depend on the earnings of...