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Explaining Income Inequalities in Developing Countries:the Role of Human Capital

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  • Mazhar Yasin MUGHAL
  • Barassou DIAWARA

Abstract

This paper investigates the relationship between human capital and economic inequality in the developing countries. The paper analyses an unbalanced panel of 64 countries for the period 1970-2005. The results show that primary, secondary and tertiary level education is negatively associated with inequality (primary being the strongest). Besides, average years of education and government expenditure on education are also found to be inequality reducing, both in the immediate and the medium run. Thus, to give citizens better and more equal opportunities, policy-makers in the developing countries and the development agencies need to give higher importance to primary education. Prenant en considération le manque de consensus dans la littérature sur le sujet, notre article étudie la relation entre le capital humain et les inégalités économiques, en abordant le cas particulier des pays en développement ou les inégalités sont flagrantes. Nous analysons un panel non-équilibré constitué de 64 pays pour la période 1970 à 2005. Les résultats montrent une liaison négative entre l’éducation primaire, ainsi que secondaire et tertiaire, et les inégalités économiques. Les autres indicateurs du capital humain contribuent également à la réduction des inégalités. Donc, afin de réduire les inégalités économiques effectivement pour fournir aux citoyens des opportunités égales, les gouvernements des pays en développement et la communauté internationale devraient se concentrer sur l’éducation primaire et supérieur.

Suggested Citation

  • Mazhar Yasin MUGHAL & Barassou DIAWARA, 2011. "Explaining Income Inequalities in Developing Countries:the Role of Human Capital," Working Papers 2011-2012_2, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Dec 2011.
  • Handle: RePEc:tac:wpaper:2011-2012_2
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    References listed on IDEAS

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    Cited by:

    1. Mazhar Yasin MUGHAL & Amar Iqbal ANWAR, 2012. "Remittances, inequality and poverty in Pakistan: macro and microeconomic Evidence," Working Papers 2012-2013_2, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Aug 2012.

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    Keywords

    Inequality; Developing countries; Human capital; Education;

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