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    A Simple Model of Inequality Occupational Choice and Development

    Ghatak, Maitreesh
    Jiang, Nien-Huei
    : http://hdl.handle.net/1803/15636
    : 2000

    Abstract

    This paper analyzes a simple and tractable model of occupational choice in the presence of credit market imperfections. We examine the relative roles of parameters governing technology and transaction costs, and history in terms of the initial wealth distribution in determinig the long term wealth distribution and level of income of an economy. The possibility of the existence of cycles, and the role of lotteries and redistributive policies in archieving greater efficiency are examined.
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