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Wiley InterScience

Economica

Economica

Volume 74 Issue 295, Pages 493 - 514

Published Online: 20 Dec 2006

© 2010 The London School of Economics and Political Science



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Education, Economic Growth and Measured Income Inequality
GÜNTHER REHME
  Technische Universität Darmstadt
Copyright © The London School of Economics and Political Science 2006

ABSTRACT

In this paper education simultaneously affects growth and income inequality. More education does not necessarily decrease inequality when the latter is assessed by the Lorenz dominance criterion. Increases in education first increase and then decrease growth as well as income inequality, when measured by the Gini coefficient. There is no clear functional relationship between growth and measured income inequality. The model identifies regimes of this relationship that depend crucially on the production and schooling technology. Conventional growth regressions with human capital and inequality as regressors may miss the richness of the underlying nonlinearities, but may still provide important information on the nonlinear relationship between growth and education.


Final version received 21 February 2006.

DIGITAL OBJECT IDENTIFIER (DOI)
10.1111/j.1468-0335.2006.00555.x About DOI

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