TITLE:
Efficacy in Education and Intergenerational Wellbeing
AUTHORS:
Masayuki Otaki
KEYWORDS:
Eficacy in Education, Intergenerational Wellbeing, Lexicographic Utility, Social Stratification, Pedagogical Skills, Random Walk with One-Sided Absorbing Barrier
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.3,
April
4,
2014
ABSTRACT: We consider an
intergenerational and educational investment stochastic model to determine the
effects of efficacy in education on affluence over time. Efficacy in education,
defined by the success probability of intergenerational education, seriously
affects the affluence in the long run of families concerned with the prosperity
of descendants. This is because since lenders of educational investment funds
cannot take collateral for humanitarian reasons, families without sufficient
wealth are excluded from educational opportunities. If education is more
effective, the accumulation of wealth releases more households from the threat
of bankruptcy in the future.