Social status pursuit, distribution of bequests and inequality

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2023-03-01
Date
2020
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Source Title
Economic Modelling
Print ISSN
0264-9993
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Publisher
Elsevier
Volume
86
Issue
Pages
183 - 191
Language
English
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Abstract

The quest for social status modifies lifetime decisions and as a consequence, the trajectory of the overall economy. Focusing on the relative wealth dimension of social status, we build a two-period overlapping generations model with heterogeneous agents to investigate the effects of status quest on the evolution of bequest distribution and household inequality. We show that the bequest motive and the concern for social status not only increase the stationary level of capital but also enhance the household equality.

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