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Educational Qualifications And Wage Inequality: Evidence For Europe

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  • SANTIAGO BUDRÍA

    (University of Madeira)

  • PEDRO TELHADO-PEREIRA

    (University of Madeira)

Abstract

In this paper we investigate the connection between education and wage inequality in nine European countries. We exploit the quantile regression technique to calculate returns to lower secondary, upper secondary and tertiary education at different points of the wage distribution. Using data from the last few decades, we describe changes in the conditional wage distribution of the surveyed countries. We find that in most European countries the amount of conditional wage dispersion within education groups is substantially higher and has grown faster among college-educated workers than among less educated workers.

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Bibliographic Info

Article provided by Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica in its journal Revista de Economía Aplicada.

Volume (Year): 19 (2011)
Issue (Month): 2 (Autumn)
Pages: 5-34

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Handle: RePEc:rev:reveca:v:19:y:2011:i:2:p:5-34

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Keywords: Returns to education; Quantile regression; Wage inequality;

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  1. Tom Clark & Jayne Taylor, 1999. "Income inequality: a tale of two cycles?," Fiscal Studies, Institute for Fiscal Studies, vol. 20(4), pages 387-408, December.
  2. José A. F. Machado & José Mata, 2001. "Earning functions in Portugal 1982-1994: Evidence from quantile regressions," Empirical Economics, Springer, vol. 26(1), pages 115-134.
  3. Pereira, Pedro T. & Martins, Pedro S., 2001. "Is there a Return-Risk Link in Education?," IZA Discussion Papers 321, Institute for the Study of Labor (IZA).
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  5. Alberto Abadie, 1997. "Changes in Spanish labor income structure during the 1980's: a quantile regression aproach," Investigaciones Economicas, Fundación SEPI, vol. 21(2), pages 253-272, May.
  6. Joop Hartog & Pedro T. Pereira & José A.C. Vieira, 1999. "Changing Returns to Education in Portugal during the 1980s and Early 1990s: OLS and quantile regression estimators," Tinbergen Institute Discussion Papers 99-002/3, Tinbergen Institute.
  7. Gosling, Amanda & Machin, Stephen & Meghir, Costas, 2000. "The Changing Distribution of Male Wages in the U.K," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 635-66, October.
  8. Fersterer, Josef & Winter-Ebmer, Rudolf, 1999. "Are Austrian Returns to Education Falling Over Time?," CEPR Discussion Papers 2313, C.E.P.R. Discussion Papers.
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  10. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
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  12. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
  13. Machin, Stephen, 1997. "The decline of labour market institutions and the rise in wage inequality in Britain," European Economic Review, Elsevier, vol. 41(3-5), pages 647-657, April.
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  17. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
  18. Mark Sanders & Bas ter Weel, 2000. "Skill-Biased Technical Change Theoretical Concepts, Empirical Problems and a Survey of the Evidence," DRUID Working Papers 00-8, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  19. Pereira, Pedro Telhado & Martins, Pedro Silva, 2002. "Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries," Discussion Papers 709, The Research Institute of the Finnish Economy.
  20. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-58, March.
  21. De Gregorio, Jose & Lee, Jong-Wha, 2002. "Education and Income Inequality: New Evidence from Cross-Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
  22. Vieira, Jose A. C., 1999. "Returns to education in Portugal," Labour Economics, Elsevier, vol. 6(4), pages 535-541, November.
  23. Cholezas, Ioannis & Tsakloglou, Panos, 2007. "Earnings Inequality in Europe: Structure and Patterns of Inter-Temporal Changes," IZA Discussion Papers 2636, Institute for the Study of Labor (IZA).
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