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Does educational achievement help to explain income inequality?

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Daniele Checchi ()

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Abstract

In this paper we propose to measure inequality of educational achievements by constructing a Giniindex on educational attainments. We then use the proposed measure to analyse the relationshi between inequality in incomes and educational achievements (in terms of both the average attainments and its concentration). Even if theoretical considerations suggest a non-linear relationship between these two measures of inequality, actual data indicate that average years of education have a stronger negative impact on measured income inequality. Multivariate regressions also prove that, once we take into account the negative correlation between average educational achievement and its dispersion, the relationship between income inequality and average years of schooling is U-shaped, with a lower turning point at 6.5 years. Income inequality is also negatively related to per capita income and positively related to capital/output ratio and government expenditure in education. Looking at relative contribution of education to income inequality, we find that it contributes to explain a portion of variance enclosed between 3% and 16%, but this fraction is higher in developed countries and shows a rising trend.

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Paper provided by Department of Economics University of Milan Italy in its series Departemental Working Papers with number 2000-11.

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Date of creation: 01 Jan 2000
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Handle: RePEc:mil:wpdepa:2000-11

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References listed on IDEAS
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.:
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  3. 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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  4. Atkinson, A. B., 1997. "Measurement of Trends in Poverty and the Income Distribution," Cambridge Working Papers in Economics 9712, Faculty of Economics, University of Cambridge.
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  6. Andrew Glyn & Wiener Salverda, 2000. "Employment Inequalities," Macroeconomics 0004039, EconWPA. [Downloadable!]
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  18. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April. [Downloadable!] (restricted)
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  19. repec:fth:coluec:595 is not listed on IDEAS
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  23. Kevin M. Murphy & W. Craig Riddell & Paul M. Romer, 1998. "Wages, Skills, and Technology in the United States and Canada," NBER Working Papers 6638, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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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. Andrés Rodríguez-Pose & Vassilis Tselios, 2007. "Education and income inequality in the regions of the European Union," Working Papers 2007-17, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales. [Downloadable!]
    Other versions:
  2. Coen Teuling & Thijs van Rens, 2001. "Education, Growth and Income Inequality," Economics Working Papers 942, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2006. [Downloadable!]
    Other versions:
  3. Rita Asplund, 2004. "A Macroeconomic Perspective on Education and Inequality," Discussion Papers 906, The Research Institute of the Finnish Economy. [Downloadable!]
  4. Daniele Checchi & Cecilia Garcia-Peñalosa, 2005. "Labour Market Institutions and the Personal Distribution of Income in the OECD," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Patricia Justino & Julie Litchfield & Yoko Niimi, 2004. "Multidimensional Inequality: An Empirial Application to Brazil," PRUS Working Papers 24, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
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