Sorting and long-run inequality

Raquel Fernandez, Richard Rogerson

    Research output: Contribution to journalArticle

    Abstract

    Many social commentators have raised concerns over the possibility that increased sorting in society may lead to greater inequality. To investigate this, we construct a dynamic model of intergenerational education acquisition, fertility, and marital sorting and parameterize the steady state to match several basic empirical findings. We find that increased sorting will significantly increase income inequality. Four factors are important to our findings: a negative correlation between fertility and education, a decreasing marginal effect of parental education on children's years of education, wages that are sensitive to the relative supply of skilled workers, and borrowing constraints that affect educational attainment for some low-income households.

    Original languageEnglish (US)
    Pages (from-to)1305-1341
    Number of pages37
    JournalQuarterly Journal of Economics
    Volume116
    Issue number4
    DOIs
    StatePublished - 2001

    Fingerprint

    Education
    Sorting
    Fertility
    Skilled workers
    Borrowing constraints
    Wages
    Educational attainment
    Parental education
    Household
    Marginal effects
    Income inequality
    Low income
    Factors

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Sorting and long-run inequality. / Fernandez, Raquel; Rogerson, Richard.

    In: Quarterly Journal of Economics, Vol. 116, No. 4, 2001, p. 1305-1341.

    Research output: Contribution to journalArticle

    Fernandez, R & Rogerson, R 2001, 'Sorting and long-run inequality', Quarterly Journal of Economics, vol. 116, no. 4, pp. 1305-1341. https://doi.org/10.1162/003355301753265589
    Fernandez, Raquel ; Rogerson, Richard. / Sorting and long-run inequality. In: Quarterly Journal of Economics. 2001 ; Vol. 116, No. 4. pp. 1305-1341.
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