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Education and Income Inequality in the Regions of the European Union

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  • Andres Rodriguez-Pose

    ()

  • Vasileios Tselios

    ()

Abstract

The paper provides an empirical study of the determinants of income inequality across regions of the EU. Using the European Community Household Panel data set for 102 regions over the period 1995-2000, it analyses how microeconomic changes in human capital distribution affect income inequality. Human capital distribution is measured in terms of both human capital stock, as well as human capital inequality. Income and human capital inequalities are calculated by a generalised entropy index (Theil index). Different static and dynamic panel data analyses are conducted in order to reduce measurement error on inequalities and minimise potential problems of omitted-variable bias. The regression results suggest that, in the short term, human capital inequality is negatively associated to the average regional income and the average level of education of the population. The results also highlight that a highly unequal distribution of education level completed is associated to lower, rather than to higher inequality, highlighting the effectiveness of the European social system or, from a different perspective, the lack of responsiveness of EU labour market to differences in qualifications and skills. Additionally, high unemployment is associated with higher income inequality, while urbanisation has the opposite effect.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p370.

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Date of creation: Aug 2006
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Handle: RePEc:wiw:wiwrsa:ersa06p370

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Citations

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Cited by:
  1. Andr�s Rodr�guez-Pose & Vassilis Tselios, 2012. "Welfare regimes and the incentives to work and get educated," Environment and Planning A, Pion Ltd, London, vol. 44(1), pages 125-149, January.
  2. Vassilis Tselios, 2009. "Growth and Convergence in Income Per Capita and Income Inequality in the Regions of the EU," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(3), pages 343-370.
  3. Farole, Thomas & Rodríguez-Pose, Andrés & Tselios, Vassilis & Winkler, Deborah, 2013. "Geography and the Determinants of Firm Exports in Indonesia," CEPR Discussion Papers 9342, C.E.P.R. Discussion Papers.
  4. Agasisti, Tommaso & Cordero-Ferrera, Jose M., 2013. "Educational disparities across regions: A multilevel analysis for Italy and Spain," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 1079-1102.
  5. Kim, Dong-Hyeon & Lin, Shu-Chin, 2011. "Nonlinearity in the financial development–income inequality nexus," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 310-325, September.
  6. Psycharis, Yannis & Rodríguez-Pose, Andrés & Tselios, Vassilis, 2012. "Public investment and regional growth and convergence: Evidence from Greece," CEPR Discussion Papers 9011, C.E.P.R. Discussion Papers.
  7. Rafael Alvarado & Miguel Atienza, 2014. "The role of market access and human capital in regional wage disparities: Empirical evidence for Ecuador," Documentos de Trabajo en Economia y Ciencia Regional 53, Universidad Catolica del Norte, Chile, Department of Economics, revised Mar 2014.
  8. Rodríguez-Pose, Andrés & Tselios, Vassilis, 2008. "Mapping Regional Personal Income Distribution in Western Europe: Income per Capita and Inequality," Papers DYNREG33, Economic and Social Research Institute (ESRI).
  9. Checchi, Daniele & van de Werfhorst, Herman G., 2014. "Educational Policies and Income Inequality," IZA Discussion Papers 8222, Institute for the Study of Labor (IZA).
  10. Rodríguez-Pose, Andrés & Tselios, Vassilis, 2008. "Inequalities in Income and Education and Regional Economic Growth in Western Europe," Papers DYNREG34, Economic and Social Research Institute (ESRI).

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