RESEARCH papers
Mobility, Social Security, Savings, and Inequality with Two-sided Altruism and Uncertain Earnings Ability,
with Jie Zhang, job market paper
We examine the effects of falling intergenerational mobility and rising social security on savings and distributions of wealth and income in a dynastic model with two-sided altruism and uncertain earnings ability. When mobility declines, high (low) earning households reduce (raise) savings. When social security expands, households experiencing upward (downward) mobility tend to reduce (raise) savings. Both life-cycle features and two-sided altruism improve the fitting of wealth distribution to data. Falling mobility and rising social security explain a large proportion of the fall in the gross saving rate and the rises of wealth and income inequality from 1980 to 2000.
Returns to Education, Indeterminacy, and Multiple Balanced Growth Paths,
with Jie Zhang
We investigate the existence, multiplicity, and indeterminacy of balanced growth paths in an extended Lucas model incorporating physical capital inputs, human capital externalities, and decreasing returns to scale in education. With physical capital in education and increasing social returns in production, social returns to scale in education should be decreasing for the existence of balanced growth; indeterminacy can arise for weaker human capital externalities; and multiple balanced growth paths may emerge with perhaps distinctive dynamic properties: The high-growth steady state may be indeterminate, while the low-growth steady state may be determinate, but not vice versa.
Is Health Care Really a National Luxury? An Instrumental Variable Estimate from Cross-country Panel Data
with Jie Zhang, job market paper
We examine the effects of falling intergenerational mobility and rising social security on savings and distributions of wealth and income in a dynastic model with two-sided altruism and uncertain earnings ability. When mobility declines, high (low) earning households reduce (raise) savings. When social security expands, households experiencing upward (downward) mobility tend to reduce (raise) savings. Both life-cycle features and two-sided altruism improve the fitting of wealth distribution to data. Falling mobility and rising social security explain a large proportion of the fall in the gross saving rate and the rises of wealth and income inequality from 1980 to 2000.
Returns to Education, Indeterminacy, and Multiple Balanced Growth Paths,
with Jie Zhang
We investigate the existence, multiplicity, and indeterminacy of balanced growth paths in an extended Lucas model incorporating physical capital inputs, human capital externalities, and decreasing returns to scale in education. With physical capital in education and increasing social returns in production, social returns to scale in education should be decreasing for the existence of balanced growth; indeterminacy can arise for weaker human capital externalities; and multiple balanced growth paths may emerge with perhaps distinctive dynamic properties: The high-growth steady state may be indeterminate, while the low-growth steady state may be determinate, but not vice versa.
Is Health Care Really a National Luxury? An Instrumental Variable Estimate from Cross-country Panel Data