Study Of Dynamics Of The Education Investment And Wealth Distribution In The Imperfect Credit Market

Empirical data shows that some countries and regions had ever achieved rapid economic growth in certain periods after the end of World War II. But there were not all these countries or regions'income and wealth distribution improved in these processes, and some countries'distribution depraved. These differences make us have a major motivation to develop a distribution model with overlapping generations and inter- generational altruism to study the relationship and dynamics between education investments and wealth distribution in the imperfect credit market on the basis of the labor market with dual structure in developing countries. Then through introducing a population mechanism, the impact of the population laws and policies on dynamics of education investment and wealth distribution is analyzed in the paper.It is shown that in the presence of credit market's imperfections, the way of investing human capital to be skilled-worker to improve wealth level will be restricted for those people with lower wealth. Then distribution of wealth exist two steady states, in other words, it will tend certain steady inequality state and it may become polarized. But if credit market is perfect, wealth distribution has only a steady state and ultimately contracts to equality. The population reproduction law can enhance the tendency toward wealth inequality. Conclusions of this paper reject the Kuznets Hypothesis and the opinion of wealth distribution will be in the tendency of equality automatically. It is necessary to improve equalization of wealth distribution through certain community policy which in favor of popularization of education.Reducing the price of educational resources and expanding investment in education region are effective ways to reach distribution equality. The establishment of Personal Credit System and State-subsidized Student Loan System is helpful to reduce bank'risk, then more people can invest in human capital by borrowing. Enhance people's income levels help improve distribution equality. Family Planning Policy can make china's economy develop in the right direction,but maybe it's not helpful for improvement of the distribution, maybe it's necessary for some province to adjust the population policy according to its own circumstances.