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Education, Economic Growth and Measured Income Inequality

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  • Rehme, Günther

Abstract

In this paper education simultaneously affects growth and income inequality. More education does not necessarily decrease inequality when the latter is assessed by the Lorenz dominance criterion. Increases in education first increase and then decrease growth as well as income inequality, when measured by the Gini coefficient. There is no clear functional relationship between growth and measured income inequality. The model identifies regimes of this relationship which depend crucially on the production and schooling technology. Conventional growth regressions with human capital and inequality as regressors may miss the richness of the underlying nonlinearities, but viewed as approximations may still provide important information on the nonlinear relationship between growth and education.

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Bibliographic Info

Paper provided by Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL) in its series Darmstadt Discussion Papers in Economics with number 25519.

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Date of creation: Mar 2006
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Publication status: Published in Darmstadt Discussion Papers in Economics . 163 (2006-03)
Handle: RePEc:dar:ddpeco:25519

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Keywords: Keywords: Education; Growth; Inequality; Policy;

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Cited by:
  1. Çoban, Serap, 2008. "The Relationships among Mortality Rates, Income and Educational Inequality in Terms of Economic Growth: A Comparison between Turkey and the Euro Area," MPRA Paper 13296, University Library of Munich, Germany.
  2. Ruß, Uwe, 2012. "Bildung, Meritokratie und Ungleichheit: Gibt es einen Zusammenhang zwischen Bildungsungleichheiten, Meritokratieglauben und der Verteilung der Einkommen in fortgeschrittenen Gesellschaften?," Discussion Papers, Research Unit: Skill Formation and Labor Markets SP I 2012-501, Social Science Research Center Berlin (WZB).
  3. David Mayston & Juan Yang, 2012. "Education, Risk and Efficiency in Human Capital Investment," Discussion Papers 12/15, Department of Economics, University of York.
  4. D Mayston & J Yang, 2008. "A Pecking Order Analysis of Graduate Overeducation and Educational Investment in China," Discussion Papers 08/25, Department of Economics, University of York.
  5. Aziz, Babar & Khan, Tasneem & Aziz, Shumaila, 2008. "Impact of Higher Education on Economic Growth of Pakistan," MPRA Paper 22912, University Library of Munich, Germany, revised 2008.
  6. V. Chandran Govindaraju & Ramesh Rao & Sajid Anwar, 2011. "Economic growth and government spending in Malaysia: a re-examination of Wagner and Keynesian views," Economic Change and Restructuring, Springer, vol. 44(3), pages 203-219, August.

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