Massimo Giannini

Accumulation and Distribution of Human Capital: The Interaction Between Individual and Aggregate Variables

The paper analyzes the joint evolution of accumulation and distribution of human capital in an OLG framework. Dynamics arises from the interplay between human capital distribution and individual variables - inherited human capital and inborn ability. Such interaction drives individual investment in human capital and accumulation in the economy. According to the initial distribution the model provides different dynamical behaviours linking growth and inequality; in general economies with a more equal initial distribution grow faster but other cases are possible. Moreover, since the model provides an endogenous threshold for investing in human capital, the distribution is characterized by multi- modality

National vs local funding for education: effects on growth and inequality

This paper develops a two‐period overlapping generations model with heterogeneous agents aiming at analysing how decentralization in the provision of public education affects growth and personal inequality via human capital investment. Education is financed by a tax levied by either national or local authorities. The tax rate is chosen according to a median voter mechanism. During their working period of life, individuals look after their offspring by providing them with a high level of school education stemming from taxation. In addition parents contributions to the social security system provide them with retirement income. Heterogeneity accounts for the differences in the optimal taxation mechanism, linking the income distribution to the tax rate, and hence to human capital accumulation, growth and income inequality. In this way we relate differences among agents to the tax rate. We show that decentralization induces growth rate disparities among local communities but it can be ruled out by a proper fiscal substitution between social security and locally provided education. Unlike in the literature, this type of fiscal design allows local economies to grow faster and more equally than the national design.

Accounting for Child Mortality in the Pre-Industrial European Economy

Different factors are often assigned an important role in the emergence of modern growth, such as the relationship between demographic factors and changes in institutions that promote innovation, the production of new ideas, the development of education or improvements in technology. In this paper we examine a basic factor, the probability of child survival. We find a negative relationship between child mortality and birth rate. Our results conflict with works which argue that with stochastic mortality a large precautionary demand for children arises, which would lead to mortality decline having a negative effect on net fertility.

Multiple regimes in human capital accumulation

Aims to provide an analytical framework investigating the accumulation of human capital in an OLG framework characterized by a continuous interplay between human capital distribution and individual choice of accumulation. This leads to a wide variety of dynamics. Generally, more equal economies tend to accumulate a higher human capital but other cases are possible. The accumulation is characterized by bimodality or multimodality in the human capital distribution and by an endogenous poverty trap.

Education and Job Market Signalling: How Robust Is the Nexus?

In this paper the Signalling approach to the explanation of wage differentials is analysed in a critical way. Departing from the classic Spences model, the article shows how the introduction of inequalities in accessing to education leads to separating equilibria characterised by redistributive effects among workers and firms, with lower wages for high skill workers respect to the traditional model. Moreover pooling equilibria can also exist as effect of such inequalities; in this case a unique wage exists for all types of workers, operating as a redistributive effect from high-skill to low-skill workers.