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Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax(More)
This paper analyzes one-good exchange economies with two infinitely-lived agents and incomplete markets. It is shown that there are no recursive (Markov) equilibria for which borrowing (debt) constraints never bind if the state space of exogenous and endogenous variables is a compact subset of IR n. Moreover, for large enough (but finite) borrowing limits,(More)
  • W F Maloney, James Heckman, Jose Antonio Gonzalez, Tom Krebs, Carmen Pages-Serra, John
  • 2015
The Mexican labor market is characterized by two dramatic features: a very large share of the work force is informal, defined as workers in firms of under six employees who do not enjoy labor protections; and labor turnover is very high. After synthesizing research emerging over the last few years, I offer a view of the dynamics of the market substantially(More)
This paper develops a tractable, heterogeneous agents general equilibrium model where individuals have different endowments of the factors that complement the schooling process. The paper explores the relation between inequality of opportunities , inequality of outcomes, and efficiency in human capital formation. Using numerical solutions we study how the(More)
We use data from the Survey of Consumer Finance and Survey of Income Program Participation to show that young households with children are under-insured against the risk that an adult member of the household dies. We develop a macroeconomic model with human capital risk, limited pledgability of human capital (limited contract enforcement), and age-dependent(More)
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