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

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José De Gregorio ()
Jong-Wha Lee ()

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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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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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  3. Marin, Alan & Psacharopoulos, George, 1976. "Schooling and Income Distribution," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 332-38, August. [Downloadable!] (restricted)
  4. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Blackwell Publishing, vol. 60(1), pages 35-52, January. [Downloadable!] (restricted)
  5. Galor, Oded & Tsiddon, Daniel, 1997. " The Distribution of Human Capital and Economic Growth," Journal of Economic Growth, Springer, vol. 2(1), pages 93-124, March. [Downloadable!] (restricted)
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  6. Becker, Gary S & Tomes, Nigel, 1986. "Human Capital and the Rise and Fall of Families," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S1-39, July. [Downloadable!] (restricted)
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  7. Knight, J B & Sabot, R H, 1983. "Educational Expansion and the Kuznets Effect," American Economic Review, American Economic Association, vol. 73(5), pages 1132-36, December. [Downloadable!] (restricted)
  8. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Atkinson, A B, 1997. "Bringing Income Distribution in from the Cold," Economic Journal, Royal Economic Society, vol. 107(441), pages 297-321, March. [Downloadable!] (restricted)
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  10. 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. [Downloadable!] (restricted)
  11. 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. [Downloadable!] (restricted)
  12. Acemoglu, Daron, 1997. " Matching, Heterogeneity, and the Evolution of Income Distribution," Journal of Economic Growth, Springer, vol. 2(1), pages 61-92, March. [Downloadable!] (restricted)
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  13. Ahluwalia, Montek S, 1976. "Income Distribution and Development: Some Stylized Facts," American Economic Review, American Economic Association, vol. 66(2), pages 128-35, May. [Downloadable!] (restricted)
  14. Se-Jik Kim & Jose De Gregorio, 1994. "Credit Markets with Differences in Abilities - Education, Distribution, and Growth," IMF Working Papers 94/47, International Monetary Fund.
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  15. Ram, Rati, 1989. "Can educational expansion reduce income inequality in less-developed countries?," Economics of Education Review, Elsevier, vol. 8(2), pages 185-195, April. [Downloadable!] (restricted)
  16. Benabou, R., 1996. "Inequality and Growth," Working Papers 96-22, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  17. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, Oxford University Press, vol. 10(3), pages 565-91, September.
  18. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June. [Downloadable!] (restricted)
  19. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January. [Downloadable!] (restricted)
  20. Durlauf, Steven N, 1996. " A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pablo García, 1999. "Income Inequality and the Real Exchange Rate," Working Papers Central Bank of Chile 54, Central Bank of Chile. [Downloadable!]
  2. Chen, Derek H.C. & Ranaweera, Thilak & Storozhuk, Andriy, 2004. "The RMSM-S+P : a minimal poverty module for the RMSM-X," Policy Research Working Paper Series 3304, The World Bank. [Downloadable!]
  3. Pablo Garcia_S., 2000. "Income Inequality and the Real Exchange Rate," Econometric Society World Congress 2000 Contributed Papers 0849, Econometric Society. [Downloadable!]
  4. H. I. Grossman & M. Kim, 1999. "Educational Policy: Egalitarian or Elitist?," Working Papers 365, Dipartimento Scienze Economiche, Università di Bologna. [Downloadable!]
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