Human Capital Accumulation, Economic Growth and Educational Subsidy Policy in a Dual Economy

  • Bidisha Chakraborty
  • Manash Ranjan Gupta
Part of the New Economic Windows book series (NEW)


This paper develops an endogenous growth model with dualism in human capital accumulation of two types of individuals. The government imposes a proportional redistributive tax on the resources of rich individuals to finance the educational subsidy given to poor individuals. We find out the properties of the optimal tax financed educational subsidy policy using the technique of Stackelberg differential game.


Human Capital Social Welfare Function Wage Inequality NBER Working Paper Human Capital Accumulation 


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Copyright information

© Springer-Verlag Italia 2010

Authors and Affiliations

  • Bidisha Chakraborty
    • 1
  • Manash Ranjan Gupta
    • 2
  1. 1.Bijoygarh Jotish Roy CollegeKolkataIndia
  2. 2.Indian Statistical InstituteKolkataIndia

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