Wealth Distribution and Occupational Choice

The paper tries to relate inequality, occupational choice and long run wealth. Defining the unskilled as poor, skilled group as middle class and entrepreneurs as rich the paper focusesstarting from a huge middle class relative to the rich along with a higher fraction of borrowing entrepreneurs within the rich group, an economy converges with a very low wealth level. In other words, one needs to have little bit inequality (in terms of wealth dispersion) to start with for long run prosperity. A high fraction of middle class is not necessarily welfare maximizing and education subsidy is not always welfare enhancing, a tax on education might be gainful for an economy in some cases. JEL Classification: D31, I30, J24, J62, O11.