Skip to main content

Education and income inequality: The role of a social protection system

Abstract.

In this paper we aim to understand the role a welfare state can play in stimulating risky but profitable activities like investment in education, and in reducing income inequality. We analyze how unemployment benefits may affect investment in education when the latter is characterized by uncertain returns. This is done in an overlapping generations model in which endogenous growth is introduced through human capital accumulation. We develop a numerical example of the model in order to reproduce some key differences between the European versus the North American economy; differences that, according to this model, result from the different degree of social protection characterizing both economies.

This is a preview of subscription content, access via your institution.

Author information

Authors and Affiliations

Authors

Additional information

Received: 02 June 1999/Accepted: 22 February 2000

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Rillaers, A. Education and income inequality: The role of a social protection system. J Popul Econ 14, 425–443 (2001). https://doi.org/10.1007/s001480000041

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s001480000041

  • JEL classification: D81
  • H55
  • I29
  • Key words: Uncertainty
  • education
  • income inequality