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The Role of Education and Income Inequality on Environmental Quality: A Panel Data Analysis of the EKC Hypothesis on OECD Countries

Author

Listed:
  • Paolo Maranzano

    (Department of Economics, Management and Statistics (DEMS), University of Milano-Bicocca, Piazza dell’Ateneo Nuovo, 1, 20126 Milano, Italy)

  • João Paulo Cerdeira Bento

    (Department of Economics, Management, Industrial Engineering and Tourism (DEGEIT), Campus Universitário de Santiago, University of Aveiro, 3810-193 Aveiro, Portugal)

  • Matteo Manera

    (Department of Economics, Management and Statistics (DEMS), University of Milano-Bicocca, Piazza dell’Ateneo Nuovo, 1, 20126 Milano, Italy
    Fondazione Eni Enrico Mattei (FEEM), Corso Magenta, 63, 20126 Milano, Italy)

Abstract

This study examines the impact of education on the pollution–income relationship, controlling for income inequality in 17 European OECD countries over the period 1950–2015. We developed a novel two-stage algorithm, whose first step consists in applying clustering techniques to group countries according to the income inequality temporal pattern. In the second step, we estimate the educational-mitigated EKC hypothesis (Educational EKC) by employing panel regression techniques accounting for endogeneity issues. The clustering findings suggest the existence of high variability in income inequality levels across countries and heterogeneous development patterns. Empirical estimates highlight that, for high income inequality countries, the Educational EKC hypothesis holds, and that the emissions–income elasticity appears to decline when including the schooling level. In the low income inequality cluster, these effects are not clear-cut. For these countries, we propose a different specification of the EKC, which substitutes the income per capita term with the years of schooling. The new specification is statistically validated for both high income inequality and low income inequality countries. In conclusion, we can state that education should be addressed as a crucial cornerstone to shaping the EKC curve.

Suggested Citation

  • Paolo Maranzano & João Paulo Cerdeira Bento & Matteo Manera, 2022. "The Role of Education and Income Inequality on Environmental Quality: A Panel Data Analysis of the EKC Hypothesis on OECD Countries," Sustainability, MDPI, vol. 14(3), pages 1-24, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1622-:d:738674
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    Citations

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    Cited by:

    1. Xiaoxue Liu & Fuzhen Cao & Shuangshuang Fan, 2022. "Does Human Capital Matter for China’s Green Growth?—Examination Based on Econometric Model and Machine Learning Methods," IJERPH, MDPI, vol. 19(18), pages 1-27, September.
    2. Bertrand Hamaide, 2022. "Sustainability and the Environmental Kuznets Curve Conjecture: An Introduction," Sustainability, MDPI, vol. 14(12), pages 1-4, June.
    3. Antonello Maruotti & Pierfrancesco Alaimo Di Loro, 2023. "CO2 emissions and growth: A bivariate bidimensional mean‐variance random effects model," Environmetrics, John Wiley & Sons, Ltd., vol. 34(5), August.
    4. Busayo Victor Osuntuyi & Hooi Hooi Lean, 2023. "Moderating Impacts of Education Levels in the Energy–Growth–Environment Nexus," Sustainability, MDPI, vol. 15(3), pages 1-18, February.
    5. Magdalena Radulescu & Daniel Balsalobre-Lorente & Foday Joof & Ahmed Samour & Turgut Türsoy, 2022. "Exploring the Impacts of Banking Development, and Renewable Energy on Ecological Footprint in OECD: New Evidence from Method of Moments Quantile Regression," Energies, MDPI, vol. 15(24), pages 1-14, December.
    6. Yang Yu & Magdalena Radulescu & Abanum Innocent Ifelunini & Stephen Obinozie Ogwu & Joshua Chukwuma Onwe & Atif Jahanger, 2022. "Achieving Carbon Neutrality Pledge through Clean Energy Transition: Linking the Role of Green Innovation and Environmental Policy in E7 Countries," Energies, MDPI, vol. 15(17), pages 1-23, September.

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