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Education and Income Distribution: New Evidence from Cross-country Data

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  • José De Gregorio
  • Jong-Wha Lee

Abstract

This paper presents empirical evidence on how education is related to income distribution in a panel data set of a broad range of countries for a period between 1960 and 1990. The findings indicate that education factors - higher attainment and more equal distribution of education - play a significant role in making income distribution more equal. The result also confirms the Kuznets inverted-U curve for the relationship between income level and income inequality. We also find that government social expenditure contributes to more equal distribution of income. However, a significant proportion of cross-country and over-time variations of income inequality still remain unexplained. Simulation exercises on income distribution show that growth of income and education on their own cannot make income distribution more equal in the short and medium term.

Suggested Citation

  • José De Gregorio & Jong-Wha Lee, 1999. "Education and Income Distribution: New Evidence from Cross-country Data," Documentos de Trabajo 55, Centro de Economía Aplicada, Universidad de Chile.
    • Handle: RePEc:edj:ceauch:55
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    3. Gundlach, Erich & Hemmer, Hans-Rimbert, 2003. "Soziale Ertragsraten und Verteilungseffekte des Humankapitals: internationale Evidenz," Open Access Publications from Kiel Institute for the World Economy 3223, Kiel Institute for the World Economy (IfW Kiel).
    4. Digdowiseiso, Kumba, 2010. "Measuring gini coefficient of education: the Indonesian cases," MPRA Paper 19865, University Library of Munich, Germany.
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    6. Bas van Leeuwen & Peter Foldvari, 2012. "The development of inequality and poverty in Indonesia, 1932-1999," Working Papers 0026, Utrecht University, Centre for Global Economic History.
    7. Kevin Sylwester, 2003. "Enrolment in Higher Education and Changes in Income Inequality," Bulletin of Economic Research, Wiley Blackwell, vol. 55(3), pages 249-262, July.
    8. Isaac Ehrlich & Jinyoung Kim, 2007. "The Evolution of Income and Fertility Inequalities over the Course of Economic Development: A Human Capital Perspective," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 137-174.
    9. Herschel I. Grossman & Minseong Kim, 2003. "Educational Policy: Egalitarian or Elitist?," Economics and Politics, Wiley Blackwell, vol. 15(3), pages 225-246, November.
    10. José De Gregorio & Jong–Wha Lee, 2002. "Education and Income Inequality: New Evidence From Cross‐Country Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 395-416, September.
    11. Dawood MAMOON, 2018. "Skilled-unskilled wage asymmetries as an outcome of skewed international trade patterns in the South," Turkish Economic Review, KSP Journals, vol. 5(1), pages 65-82, March.
    12. Chen,Derek Hung Chiat & Ranaweera,Thilakaratna & Storozhuk, Andriy, 2004. "The RMSM-S+P : a minimal poverty module for the RMSM-X," Policy Research Working Paper Series 3304, The World Bank.
    13. Gundlach, Erich & Navarro de Pablo, José & Weisert, Natascha, 2004. "Education is good for the poor: a note on Dollar and Kraay," Open Access Publications from Kiel Institute for the World Economy 3199, Kiel Institute for the World Economy (IfW Kiel).
    14. Pablo Garcia_S., 2000. "Income Inequality and the Real Exchange Rate," Econometric Society World Congress 2000 Contributed Papers 0849, Econometric Society.
    15. Gabriel-Andrei Donici, 2011. "Public Education And Economic Competitiveness," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3(3), pages 398-403, September.
    16. Samina Sabir & Nighat Aziz, 2018. "Impact of Health and Education on Income Inequality: Evidence from Selected Developing Countries," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 10(4), pages 83-102, December.
    17. Stamatis Kalogirou & Thomas Hatzichristos, 2007. "A Spatial Modelling Framework for Income Estimation," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(3), pages 297-316.
    18. Dinh, Cuong & Nguyen, Cuong & Pham, Phuong, 2014. "Does Microcredit Have an Impact on Children? Evidences from Vietnam," MPRA Paper 71092, University Library of Munich, Germany.
    19. IBOURK, Aomar & AMAGHOUSS, Jabrane, 2015. "Inequality In Education In The Mena Region: A Macroeconometric Investigation Using Normative Indicators," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(2), pages 129-146.
    20. Nicolás Garrido & Adriana Marina, 2002. "Income mobility: a characterization in Argentina using archetypes," Estudios de Economia, University of Chile, Department of Economics, vol. 29(1 Year 20), pages 123-138, June.
    21. Deininger, Klaus & Olinto, Pedro, 2000. "Asset distribution, inequality, and growth," Policy Research Working Paper Series 2375, The World Bank.
    22. Adriana Marina, 2000. "Economic convergence of the first and second moment in the provinces of Argentina," Estudios de Economia, University of Chile, Department of Economics, vol. 27(2 Year 20), pages 259-277, December.
    23. Viarengo, Martina, 2007. "An historical analysis of the expansion of compulsory schooling in Europe after the Second World War," Economic History Working Papers 4286, London School of Economics and Political Science, Department of Economic History.

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