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Education and Income Distribution: New Evidence from Cross-country Data

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  • José De Gregorio

    ()

  • Jong-Wha Lee

    ()

Abstract

This paper presents empirical evidence on how education is related to income distribution in a panel data set of a broad range of countries for a period between 1960 and 1990. The findings indicate that education factors - higher attainment and more equal distribution of education - play a significant role in making income distribution more equal. The result also confirms the Kuznets inverted-U curve for the relationship between income level and income inequality. We also find that government social expenditure contributes to more equal distribution of income. However, a significant proportion of cross-country and over-time variations of income inequality still remain unexplained. Simulation exercises on income distribution show that growth of income and education on their own cannot make income distribution more equal in the short and medium term.

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Bibliographic Info

Paper provided by Centro de Economía Aplicada, Universidad de Chile in its series Documentos de Trabajo with number 55.

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Date of creation: 1999
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Handle: RePEc:edj:ceauch:55

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  1. Benabou, R., 1994. "Education, Income Distribution, and Growth: The Local Connection," Working papers 94-16, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Durlauf, Steven N, 1996. " A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
  3. Jose De Gregorio & Se-Jik Kim, 1994. "Credit Markets with Differences in Abilities," IMF Working Papers 94/47, International Monetary Fund.
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  8. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
  9. Roland Bénabou, 1996. "Inequality and Growth," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 11-92 National Bureau of Economic Research, Inc.
  10. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
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  17. Marin, Alan & Psacharopoulos, George, 1976. "Schooling and Income Distribution," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 332-38, August.
  18. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May.
  19. Ram, Rati, 1984. "Population increase, economic growth, educational inequality, and income distribution : Some recent evidence," Journal of Development Economics, Elsevier, vol. 14(3), pages 419-428, April.
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Cited by:
  1. Gundlach, Erich & Hemmer, Hans-Rimbert, 2003. "Soziale Ertragsraten und Verteilungseffekte des Humankapitals: internationale Evidenz," Open Access Publications from Kiel Institute for the World Economy 3223, Kiel Institute for the World Economy (IfW).
  2. Isaac Ehrlich & Jinyoung Kim, 2007. "The Evolution Of Income And Fertility Inequalities Over The Course Of Economic Development: A Human Capital Perspective," Discussion Paper Series 0704, Institute of Economic Research, Korea University.
  3. Pablo Garcia_S., 2000. "Income Inequality and the Real Exchange Rate," Econometric Society World Congress 2000 Contributed Papers 0849, Econometric Society.
  4. Nicolás Garrido & Adriana Marina, 2002. "Income mobility: a characterization in Argentina using archetypes," Estudios de Economia, University of Chile, Department of Economics, vol. 29(1 Year 20), pages 123-138, June.
  5. Herschel I. Grossman & Minseong Kim, 2003. "Educational Policy: Egalitarian or Elitist?," Economics and Politics, Wiley Blackwell, vol. 15(3), pages 225-246, November.
  6. Adriana Marina, 2000. "Economic convergence of the first and second moment in the provinces of Argentina," Estudios de Economia, University of Chile, Department of Economics, vol. 27(2 Year 20), pages 259-277, December.
  7. Digdowiseiso, Kumba, 2010. "Measuring gini coefficient of education: the Indonesian cases," MPRA Paper 19865, University Library of Munich, Germany.
  8. Chen,Derek Hung Chiat & Ranaweera,Thilakaratna & Storozhuk, Andriy, 2004. "The RMSM-S+P : a minimal poverty module for the RMSM-X," Policy Research Working Paper Series 3304, The World Bank.
  9. Bas van Leeuwen & Peter Foldvari, 2012. "The development of inequality and poverty in Indonesia, 1932-1999," Working Papers 0026, Utrecht University, Centre for Global Economic History.

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