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Education, Economic Growth and Personal Income Inequality across (Rich) Countries

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  • G nther Rehme

Abstract

This paper offers a supply-side explanation of the variation in long-run growth and inequality across countries. In the model education simultaneously affects growth and income inequality. More human capital may increase or decrease growth but also measured inequality. In contrast to some recent contributions the paper uses consistently defined data showing that higher (within-country) inequality is associated with lower growth in rich countries, even when controlling for initial income, education or fertility. Furthermore, (rich) countries that have a more productive education sector appear to have lower inequality. It is argued that institutions and policies which generate more high-skilled people or enhance the productivity of the education sector may affect long-run income equality and growth in a positive way.

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  • G nther Rehme, 2002. "Education, Economic Growth and Personal Income Inequality across (Rich) Countries," LIS Working papers 300, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:300
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    3. Julia Bock-Schappelwein & Rainer Eppel & Ulrike Famira-Mühlberger, 2009. "Sozialpolitik als Produktivkraft," WIFO Studies, WIFO, number 35602.
    4. Thomas Leoni & Wolfgang Pollan, 2003. "The Impact of Inequality on Economic Growth," WIFO Working Papers 211, WIFO.
    5. Litwiński Michł, 2019. "The Influence of Income Inequalities on Socio-Economic Development in the European Union," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 23(1), pages 45-60, March.
    6. Litwiński Michł, 2019. "The Influence of Income Inequalities on Socio-Economic Development in the European Union," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 23(1), pages 45-60, March.
    7. Timothy M. Smeeding, 2002. "Globalization, Inequality, and the Rich Countries of the G-20: Evidence from the Luxembourg Income Study (LIS)," Center for Policy Research Working Papers 48, Center for Policy Research, Maxwell School, Syracuse University.

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