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Status and income inequality in a knowledge economy

Research paper by Baochun Peng

Indexed on: 07 Jun '14Published on: 07 Jun '14Published in: The Journal of Economic Inequality



Abstract

This paper models a market for status contained in a knowledge economy. Technological progress favours the knowledge sector and inequality of income rises with productivity. We show that the expected utility of all agents can fall while output and productivity grow; and such an outcome of “immiserizing growth” hinges crucially upon the combination of concern for status and technology-induced rises in inequality.