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Should less inequality in education lead to a more equal income distribution?

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  • Péter Földvári
  • Bas van Leeuwen

Abstract

In this paper, we revisit the question whether inequality in education and human capital is closely related to income inequality. Using the most popular functional forms describing the relationship between, first, output and human capital and, second, education and human capital, we find that the effect of inequality in schooling on income inequality is very low, even insignificant in an economic sense. This is confirmed by our empirical analysis, since we find that the Gini coefficient of education yields an insignificant coefficient. If we take care of the possible simultaneity using a two-stage least-squares (2SLS) analysis, we find that there is no relationship in the case of non-OECD countries, but a positive relationship is found in the case of OECD countries. Also, we cannot confirm that a more equal distribution of education leads to higher income per capita, even though this result is sensitive to the choice of data.

Suggested Citation

  • Péter Földvári & Bas van Leeuwen, 2011. "Should less inequality in education lead to a more equal income distribution?," Education Economics, Taylor & Francis Journals, vol. 19(5), pages 537-554, February.
  • Handle: RePEc:taf:edecon:v:19:y:2011:i:5:p:537-554
    DOI: 10.1080/09645292.2010.488472
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    References listed on IDEAS

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    1. Christian Morrisson & Fabrice Murtin, 2007. "Education inequalities and the Kuznets curves: a global perspective since 1870," Working Papers halshs-00588085, HAL.
    2. Kyriacou, George A., 1991. "Level and Growth Effects of Human Capital: A Cross-Country Study of the Convergence Hypothesis," Working Papers 91-26, C.V. Starr Center for Applied Economics, New York University.
    3. William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423, November.
    4. Christian Morrisson & Fabrice Murtin, 2007. "Education inequalities and the Kuznets curves: a global perspective since 1870," PSE Working Papers halshs-00588085, HAL.
    5. Pritchett, Lant, 1996. "Where has all the education gone?," Policy Research Working Paper Series 1581, The World Bank.
    6. Frankema, Ewout & Bolt, Jutta, 2006. "Measuring and Analysing Educational Inequality: The Distribution of Grade Enrolment Rates in Latin America and Sub-Saharan Africa," GGDC Research Memorandum GD-86, Groningen Growth and Development Centre, University of Groningen.
    7. repec:dgr:rugggd:gd-86 is not listed on IDEAS
    8. Mark Bils & Peter J. Klenow, 1998. "Does Schooling Cause Growth or the Other Way Around?," NBER Working Papers 6393, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Lee, Jong-Wha & Lee, Hanol, 2018. "Human Capital and Income Inequality," ADBI Working Papers 810, Asian Development Bank Institute.
    2. Thomas Ziesemer, 2016. "Gini Coefficients of Education for 146 Countries, 1950-2010," Bulletin of Applied Economics, Risk Market Journals, vol. 3(2), pages 1-8.
    3. Elena Meschi & Francesco Scervini, 2014. "A new dataset on educational inequality," Empirical Economics, Springer, vol. 47(2), pages 695-716, September.
    4. Beate Jochimsen & Christian Raffer, 2016. "Herausforderungen bei der Messung von Wohlfahrt," Discussion Papers of DIW Berlin 1595, DIW Berlin, German Institute for Economic Research.
    5. IBOURK, Aomar & AMAGHOUSS, Jabrane, 2015. "Inequality In Education In The Mena Region: A Macroeconometric Investigation Using Normative Indicators," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(2), pages 129-146.

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