Template-Type: ReDIF-Paper 1.0
Author-Name: Dyotona Dasgupta
Author-Name-First: Dyotona
Author-Name-Last: Dasgupta
Author-Email: dasgupta.dyotona@gmail.com
Author-Workplace-Name: O.P. Jindal Global University
Author-Name: Anuradha  Saha
Author-Name-First: Anuradha 
Author-Name-Last: Saha
Author-Email: anuradha.saha@ashoka.edu.in
Author-Workplace-Name: Ashoka University
Title: Towards a Theory of Behavioral Poverty Traps
Abstract: In a dynamic setting, we build a theoretical model to capture the macroeconomic implications of parental biases on poverty traps and income inequality. Less privileged parents have biased perceptions about ‘self-efficacy’. Perceived self-efficacy is shaped by socio-economic backgrounds. We find that biases increase the extent of poverty trap. Without any biases, there exists a poverty trap only when the parental warm glow is low. With biases, there emerges a poverty trap even for moderate warm glow. For high parental warm glow, there may exist a poverty trap. Income inequality in presence of biased parents is always (weakly) higher.
length: 11
Creation-Date: 20220418
Revision-Date: 
Publication-Status: 
File-URL: https://dp.ashoka.edu.in/ash/wpaper/paper78_0.pdf
File-Format: Application/pdf 
Number: 78
Handle: RePEc:ash:wpaper:78