(In)equality in Education and Economic Development

Sauer, Petra and Zagler, Martin ORCID: https://orcid.org/0000-0003-0863-7375 (2014) (In)equality in Education and Economic Development. Review of Income and Wealth, 60 (Suppl.). pp. 353-379. ISSN 1475-4991


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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. (authors' abstract)

Item Type: Article
Additional Information: This is the accepted version of the following article: Sauer, Petra, Zagler, Martin. 2014. (In)equality in Education and Economic Development. Review of Income and Wealth, Series 60, Supplement Issue, November, which has been published in final form at http://dx.doi.org/10.1111/roiw.12142. To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription.
Keywords: education / economic growth / distribution of education
Classification Codes: JEL D31, I00, O15
Divisions: Departments > Volkswirtschaft
Version of the Document: Accepted for Publication
Variance from Published Version: Typographical
Depositing User: ePub Administrator
Date Deposited: 03 Dec 2014 09:10
Last Modified: 31 Oct 2019 13:08
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/68952/
URI: https://epub.wu.ac.at/id/eprint/4397


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