Permalink : http://hdl.handle.net/2115/29915

KEYWORDS : Human Capital;Incentives to Free Ride;Inequality

This paper examines the relationship that may be held to exist between the incentive to free ride and the persistence of inequality by studying those situations in which agents invest in human capital and then provide public goods privately. An agent's stock of human capital is affected by his parental stock; the more human capital a parent has, the more effectively his child can learn. Then, the incentives to free ride at provision of public goods in the old period are different among agents; those born of a well-educated parent studies harder than an agent born of a less-educated parent, and this lead to the persistence of inequality.