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Educational Expansion and Inequality in Indonesia: Testing the Kuznets Hypothesis with Provincial Panel Data

This study analyzes the relationship between the level of educational attainment, educational inequality and expenditure inequality in Indonesia based on a provincial panel data set from 1996-2011 and attempts to test the Kuznets hypothesis for educational expansion. We found that educational inequality decreases as the average level of educational attainment increases. In contrast, expenditure inequality follows an inverted U-shaped pattern with respect to educational expansion and reaches the maximum at around 9-10 years of education. Given the current average educational level, further educational expansion would increase expenditure inequality. However, more equal distribution of education has an equalizing effect.

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File URL: http://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2013_18.pdf
File Function: First version, 2013
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Paper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2013_18.

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Length: 28 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:iuj:wpaper:ems_2013_18
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  1. Knight, J B & Sabot, R H, 1983. "Educational Expansion and the Kuznets Effect," American Economic Review, American Economic Association, vol. 73(5), pages 1132-36, December.
  2. Park, Kang H., 1996. "Educational expansion and educational inequality on income distribution," Economics of Education Review, Elsevier, vol. 15(1), pages 51-58, February.
  3. Robinson, Sherman, 1976. "A Note on the U Hypothesis Relating Income Inequality and Economic Development," American Economic Review, American Economic Association, vol. 66(3), pages 437-40, June.
  4. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
  5. Huang, Ho-Chuan River, 2004. "A flexible nonlinear inference to the Kuznets hypothesis," Economics Letters, Elsevier, vol. 84(2), pages 289-296, August.
  6. De Gregorio, Jose & Lee, Jong-Wha, 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.
  7. Ram, Rati, 1990. "Educational Expansion and Schooling Inequality: International Evidence and Some Implications," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 266-74, May.
  8. Jha, Sailesh K., 1996. "The Kuznets curve: A reassessment," World Development, Elsevier, vol. 24(4), pages 773-780, April.
  9. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  10. Ram, Rati, 1989. "Can educational expansion reduce income inequality in less-developed countries?," Economics of Education Review, Elsevier, vol. 8(2), pages 185-195, April.
  11. Takahiro Akita & Alit Pirmansah, 2011. "Urban Inequality in Indonesia," Working Papers EMS_2011_04, Research Institute, International University of Japan.
  12. Saith, Ashwani, 1983. "Development and distribution : A critique of the cross-country U-hypothesis," Journal of Development Economics, Elsevier, vol. 13(3), pages 367-382, December.
  13. Ram, Rati, 1988. "Economic development and income inequality: Further evidence on the U-curve hypothesis," World Development, Elsevier, vol. 16(11), pages 1371-1376, November.
  14. Saith, A., 1983. "Development and distribution : a critique of the cross-country U-hypothesis," ISS Working Papers - General Series 18763, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  15. Knight, J B, 1976. "Explaining Income Distribution in Less Developed Countries: A Framework and an Agenda," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 38(3), pages 161-77, August.
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