Soft Skills, Parenting Styles, and Persistent Income Inequality

Lun, 19/09/2022 - 12:45 / 13:30

403, Viale Romania

Speaker: Mark Gradstein , Ben Gurion University

Abstract

The proposed hereby theory accounts for the persistence of income inequality by incorporating in the process of human capital formation, the main engine of growth, soft skills, instilled in children by their parents. The mental cost associated with this process affects – and is affected by – income growth, implying a bidirectional relationship that leads to a propagation mechanism. Consequently, the model economy displays multiple steady states, convergence to which depends on the initial distribution of soft skills. An extension of the model to encompass parenting styles is presented and its relation to persistent income inequality explored.