(In)equality in Education and Economic Development

Sauer, Petra and Zagler, Martin (2014) (In)equality in Education and Economic Development. Review of Income and Wealth, 60 (S2). S353-S379. ISSN 1475-4991

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Official URL: http://dx.doi.org/10.1111/roiw.12142

Abstract

This paper investigates the relationship between the level and the distribution of education and economic development. We contribute to the literature by introducing an interaction term between the education Gini coefficient and average years of schooling. In a dynamic panel over 55 years and 134 countries we provide, on the one hand, strong evidence that more schooling is good for growth, but the coefficient is variable and substantially declining in the degree of inequality. The aggregate benefit to education thus depends on a country's position in the education distribution. On the other hand, we find a slight transitional increase in education inequality to be beneficial at a very low average level of schooling, but detrimental for growth at a relatively high average level. Allowing for the macroeconomic return to education to be heterogeneous with respect to the degree of inequality is therefore paramount in understanding the relationship between education and development.

Item Type: Journal Article
Keywords: D31, I00, O15, distribution of education, economic growth, education
Faculty: ARCHIVED Lord Ashcroft International Business School (until September 2018)
SWORD Depositor: Symplectic User
Depositing User: Symplectic User
Date Deposited: 04 Sep 2019 14:58
Last Modified: 14 Nov 2019 16:13
URI: http://arro.anglia.ac.uk/id/eprint/704705

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