Research ArticleOpen AccessGoogle Scholar indexed
Efficacy in Education and Intergenerational Wellbeing
Institute of Social Sciences, University of Tokyo, Tokyo, Japan
- 1 Institute of Social Sciences, University of Tokyo, Tokyo, Japan
Theoretical Economics Letters·Volume 04 (2014)·Pages 183–189·Published 3 April 2014·DOI10.4236/tel.2014.43026
Copy link · social · email
Abstract
We consider an intergenerational and educational investment stochastic model to determine the effects of efficacy in education on affluence over time. Efficacy in education, defined by the success probability of intergenerational education, seriously affects the affluence in the long run of families concerned with the prosperity of descendants. This is because since lenders of educational investment funds cannot take collateral for humanitarian reasons, families without sufficient wealth are excluded from educational opportunities. If education is more effective, the accumulation of wealth releases more households from the threat of bankruptcy in the future.
KeywordsEficacy in EducationIntergenerational WellbeingLexicographic UtilitySocial StratificationPedagogical SkillsRandom Walk with One-Sided Absorbing Barrier
- Otaki, M. (2014) Income Disparity, Uneven Economic Opportunities, and Verifiability. Advances in Social Sciences Research Journal, 1, 44-49.
- Arrow, K.J. (1963) Uncertainty and the Welfare Economics of Medical Care. American Economic Review, 53, 941873.
- Stiglitz, J.E. and Weiss, A. (1981) Credit Rationing in Markets with Imperfect Information. American Economic Review, 71, 393-410.
- Dewey, J. (1916) Democracy and Education. Macmillan, London.
- Deere, D.R. and Vosovic, J. (2006) Educational Wage Premiums and the U.S. Income Distribution: A Survey. In: Hanuschek, E. and Welch, F. Eds., Hand Book of Educational Economics Vol. 1, North-Holland, Amsterdam, Netherland, 253-306.
- Mankiw, N.G., Romer, D. and Weil, N. (1992) A Contribution to the Empirics of Economic Growth. Quarterly Journal of Economics, 106, 407-437. http://dx.doi.org/10.2307/2118477
- Ito, S. (2014) Child Labor and Education Policies, Institute of Developing Economies-Japan External Trade Organization. http://www.ide.go.jp/Japanese/Research/Theme/Soc/Child_labor/index.html
- Cox, D.R. and Miller, H.D. (1965) The Theory of Stochastic Process. Chapman & Hall, London.
- Veblen, T. (1899) The Theory of the Leisure Class: An Economic Study of Institution. Macmillan, London.
- Merton, R.K. (1949) On Theoretical Sociology. The Free Press, New York.
- Krauss, I. (1976) Stratification, Class, and Conflict. The Free Press, New York.
- Johnston, D.B. (2001) The Economics and Politics of Income Contingent Repayment Plans. The International Higher Education Finance and Accessibility Project, State University of New York, Buffalo.
- Jensen, M.C. (1986) Agency Costs of Free Cash Flow Corporate Finance, and Takeovers. American Economic Review, 76, 323-329.