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The Persistence of  Wealth Inequality, Non-convex Technology and Fiscal Policy
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2018 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

In this thesis, I extend the model of Galor and Zeira (1993) to study the effect of fiscal policy (labor tax and subsidy) on wealth distribution and integrational mobility. Including fiscal policy to Galor and Zeira (1993) can provide additional explanation on why wealth inequality persists across countries. The results obtained show that under credit market imperfection and non-convex technology, subsidizing human capital investment and a labor tax increase the pool of investment in human capital. However, the wealth in the unskilled labor is reduced.

Place, publisher, year, edition, pages
2018.
National Category
Economics
Identifiers
URN: urn:nbn:se:uu:diva-355280OAI: oai:DiVA.org:uu-355280DiVA, id: diva2:1228276
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Available from: 2018-06-29 Created: 2018-06-27 Last updated: 2018-07-02Bibliographically approved

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