Education and Income Inequality Reconsidered: A Cross-Country Analysis of Data from 1960-2000

Abstract

Recent comparative inequality studies have addressed not only income but also other dimensions such as education and health inequality. Education has been believed to play a critical role in the nexus of inequality and growth. This study examines whether education distribution has an effect on income inequality. It empirically analyzes the relationship between education inequality and income inequality using quinquennial panel data from 100 countries for 1960-2000. The results show that education inequality and income inequality have a nonlinear, inverted-U-shaped relationship. This relationship appeared more consistently in developing countries. These findings suggest that educational opportunities should be more equally provided for better income distribution, especially in developing countries.