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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. 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.
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  9. Hongyi Li & Lyn Squire & Heng-fu Zou, 1998. "Explaining International and Intertemporal Variations in Income Inequality," CEMA Working Papers 73, China Economics and Management Academy, Central University of Finance and Economics.
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  12. 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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  15. Bénabou, Roland, 1996. "Inequality and Growth," CEPR Discussion Papers 1450, C.E.P.R. Discussion Papers.
  16. Benabou, R., 1994. "Education, Income Distribution, and Growth: The Local Connection," Working papers 94-16, Massachusetts Institute of Technology (MIT), Department of Economics.
  17. Jose De Gregorio & Se-Jik Kim, 1994. "Credit Markets with Differences in Abilities," IMF Working Papers 94/47, International Monetary Fund.
  18. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc.
  19. Acemoglu, Daron, 1996. "Matching, Heterogeneity and the Evolution of Income Distribution," CEPR Discussion Papers 1345, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. H. I. Grossman & M. Kim, 1999. "Educational Policy: Egalitarian or Elitist?," Working Papers 365, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. 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.
  3. 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.
  4. 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).
  5. Isaac Ehrlich & Jinyoung Kim, 2007. "The Evolution of Income and Fertility Inequalities over the Course of Economic Development: A Human Capital Perspective," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 137-174.
  6. Pablo Garcia_S., 2000. "Income Inequality and the Real Exchange Rate," Econometric Society World Congress 2000 Contributed Papers 0849, Econometric Society.
  7. 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.
  8. 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.
  9. Digdowiseiso, Kumba, 2010. "Measuring gini coefficient of education: the Indonesian cases," MPRA Paper 19865, University Library of Munich, Germany.

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