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GINI DP 69: Return to Education and Income Inequality in Europe and the US

Listed author(s):
  • Mastromarco, C. (Camilla)
  • Peragine, V. (Vito)
  • Serlenga, L. (Laura)

In this paper we study the relationship between wage inequality and education in 13 OECD countries over the period 1985-2005 using the Luxembourgh Income Study (LIS) data. Our results show a great deal of heterogeneity in the patterns of the rate-of-return estimates across countries. On the other hand, our results confirm the finding of a general increase in wage inequality. As for the correlation between wage premia and wage inequality, the results show a positive but weak correlation between the estimates of the education return and the Gini index and between the convexity of wage premia and wage inequality. The results show that the increase in wage inequality in the countries considered can only partially be accounted for by observable characteristics such as education and educational premia; i.e., it is largely residual in its nature.

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Paper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series GINI Discussion Papers with number 69.

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Date of creation: Dec 2011
Handle: RePEc:aia:ginidp:69
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  1. Federico Cingano & Piero Cipollone, 2009. "The private and social return to schooling in Italy," Questioni di Economia e Finanza (Occasional Papers) 53, Bank of Italy, Economic Research and International Relations Area.
  2. Elena Meschi & Francesco Scervini, 2014. "A new dataset on educational inequality," Empirical Economics, Springer, vol. 47(2), pages 695-716, September.
  3. Patrizia Luongo & Vito Peragine & Laura Serlenga, 2010. "The Private Returns to Tertiary Education in Italy and in Europe," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(3), pages 7-28, December.
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