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Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries

  • Pereira, Pedro Telhado
  • Martins, Pedro Silva

We address the impact of education upon wage inequality by drawing on evidence from fifteen European countries, during a period ranging between 1980 and 1995. We focus on within-educational-levels wage inequality by estimating quantile regressions of Mincer equations and analysing the differences in returns to education across the wage distribution and across time. Four different patterns emerge: 1) a positive and increasing contribution of education upon within-levels wage inequality the case of Portugal; 2) a positive but stable role of education in terms of inequality  Austria, Finland, France, Ireland, Netherlands, Norway, Spain, Sweden, Switzerland, UK; 3) a neutral role  Denmark and Italy; and 4) a negative impact  Germany and Greece. We thus find that in most countries dispersion in earnings increases with educational levels and that education is a risky investment. These results suggest a positive interaction between schooling and ability with respect to earnings.

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Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 709.

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Length: 41 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:rif:dpaper:709
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