The aim of this paper is to analyze the influence of social mobility on inequality dynamics and economic growth. We develop a framework in which agents accumulate human capital benefiting from two types of externalities: a social one and a local one. We first characterize the equilibrium partition which can appear at each date. We then study the dynamics properties of this model. We show that the economy can reach two possible steady states: an integrated equilibrium with the highest rate of growth and a segregated equilibrium.
