Template-Type: ReDIF-Paper 1.0

Author-Name: Dilip Mookherjee
Author-X-Name-First: Dilip			
Author-X-Name-Last: Mookherjee
Author-Email: dilipm@bu.edu
Author-Workplace-Name: Department of Economics, Boston University

Author-Name: Debraj Ray
Author-X-Name-First: Debraj 		
Author-X-Name-Last: Ray
Author-Email: debraj.ray@nyu.edu
Author-Workplace-Name: New York University and Instituto de AnŽalisis EconŽomico (CSIC)


Title: Occupational Diversity and Endogenous Inequality



Abstract: A traditional view of markets is that they equalize wealth across individuals. A more
recent literature suggests that markets are inherently disequalizing. A third viewpoint
argues that initial history is crucial in determining whether inequalities persist or not.
By constructing a theory of equilibrium investment allocation between human capital
and financial assets in the presence of borrowing constraints, we address these views
in a unified way. Two attributes of occupational diversity turn out to be central to
our understanding: span, the range of training costs across occupations, and richness,
the variety of different training costs contained within the span. The former is used to
generate a necessary and sufficient condition for markets to be disequalizing, while the
latter is shown to be directly connected to the question of history-dependence.


Length:37 pages
Creation-Date:2005-06 
Revision-Date: 
Publication-Status:
File-URL: http://www.bu.edu/econ/workingpapers/papers/Dilip%20Mookherjee/wp2005/05span05.pdf
File-Format: Application/pdf
File-Function: 
Number: WP2005-022
Classification-JEL: 
Keywords: 
Handle: RePEc:bos:wpaper:WP2005-022