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Education and Income Inequality: 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 covering a broad range of countries for the period between 1960 and 1990. The findings indicate that educational factors—higher educational attainment and more equal distribution of education —play a significant role in making income distribution more equal. The results also confirm 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 variation in income inequality remains unexplained.

Suggested Citation

  • José De Gregorio & Jong–Wha Lee, 2002. "Education and Income Inequality: New Evidence From Cross‐Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
  • Handle: RePEc:bla:revinw:v:48:y:2002:i:3:p:395-416
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    File URL: https://doi.org/10.1111/1475-4991.00060
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    References listed on IDEAS

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    1. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    2. 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.
    3. Roland Benabou, 1994. "Education, Income Distribution and Growth: The Local Connection," NBER Working Papers 4798, National Bureau of Economic Research, Inc.
    4. Winegarden, C R, 1979. "Schooling and Income Distribution: Evidence from International Data," Economica, London School of Economics and Political Science, vol. 46(181), pages 83-87, February.
    5. 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.
    6. Barry R. Chiswick, 1971. "Earnings Inequality and Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 85(1), pages 21-39.
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