As Higher Education Expands, is it Contributing to Greater Inequality?

This paper reviews the various elements that enter into the relation between higher education expansion and income distribution. Contrary to the prevailing ideology, the paper suggests that under certain conditions the mass expansion of higher education can contribute to greater income inequality. These conditions are related to three important variables not usually considered in the education-income distribution model: rising returns to university education relative to secondary and primary education, decreasing public spending differences between higher and lower levels of education, and increasing spending differences between elite and mass universities. All three appear to be increasingly common features of educational expansion in developing countries, including large ones such as China, Russia, Brazil, and India, although researchers are just beginning to observe such changing patterns of spending within higher education systems. The paper discusses the role that such payoffs and government education spending patterns can play in contributing to changes in income distribution using suggestive data from the developing countries.