Does geographical location impact educational disparities among Ecuadorians? A novel two-stage inequality decomposition method

The aim of this paper is to assess the extent of educational disparities among Ecuadorians attributed to their geographical location. For this purpose, a novel two-stage hierarchical decomposition of inequality for the half of the square of the coefficient of variation is introduced. This method, an extension of the one-stage (within/between) decomposition, is applicable to variables that can take the value zero, such as the ‘years of schooling’ variable. Using microdata bases from Ecuador’s National Survey of Employment, Unemployment and Underemployment (encompassing all twenty-four provinces and four regions in 2014 and 2021), we estimated the ‘years of schooling’ for individuals aged 24 and over, determining provincial, regional and national mean values. The proposed method allows the identification of the extent to which educational disparities among Ecuadorians (total inequality) can be attributed to differences between provinces and regions (spatial inequality), and the extent to which such educational inequality is due to variations among individuals within provinces. Moreover, it measures the educational inequality within each province and evaluates the contribution of each province to intra-provincial inequality. The results indicate that, although spatial inequality increased between the study years, total educational inequality decreased. This is because the contribution of spatial inequality to total inequality was practically negligible compared to the influence of disparities among individuals within provinces. Consequently, the reduction in the intra-provincial inequality is the reason for the decrease in educational differences among Ecuadorians. The findings potentially reflect individual-focused policies, socioeconomic features of Ecuador’s provinces and align with the official educational statistics.