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The Role of Education and Income Inequality on Environmental Quality. A Panel Data Analysis of the EKC Hypothesis on OECD

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  • Maranzano, Paolo
  • Cerdeira Bento, Joao Paulo
  • Manera, Matteo

Abstract

We study the impact of human capital and the level of education on the pollution-income relationship controlling for income inequality in 17 OECD countries. By applying an innovative approach to country grouping, based on the temporal evolution of income inequality and clustering techniques to feature the annual value of the Gini Index on disposable income from 1987 to 2015, we have estimated panel data models by distinguishing between low and high levels of income inequality country clusters. Robustness checks and endogeneity tests are further performed considering as the discriminant factor the income inequality aecting the countries in the sample. The findings highlight the role of the educational level and years of schooling in validating the EKC hypothesis. We recommend that this variable should not be neglected in future EKC studies. Therefore, any EKC theory should also acknowledge a new EKC model specification that we named the Educational EKC.

Suggested Citation

  • Maranzano, Paolo & Cerdeira Bento, Joao Paulo & Manera, Matteo, 2021. "The Role of Education and Income Inequality on Environmental Quality. A Panel Data Analysis of the EKC Hypothesis on OECD," FEEM Working Papers 310225, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemwp:310225
    DOI: 10.22004/ag.econ.310225
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    1. Cengiz Aytun & Cemil Serhat Akin, 2022. "Can education lower the environmental degradation? Bootstrap panel Granger causality analysis for emerging countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(9), pages 10666-10694, September.

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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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