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Status and income inequality in a knowledge economy

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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.

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Authors and Affiliations

  1. School of Accounting and Finance, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong

    Baochun Peng

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  1. Baochun Peng
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Correspondence to Baochun Peng.

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Peng, B. Status and income inequality in a knowledge economy. J Econ Inequal 12, 581–595 (2014). https://doi.org/10.1007/s10888-014-9274-y

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  • DOI: https://doi.org/10.1007/s10888-014-9274-y

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