Human Capital and Income Inequality
Lee, Jong-Wha; Lee, Hanol | February 2018
Abstract
This study investigates empirically how human capital, measured by educational attainment, is related to income distribution. The regressions, using a panel data set covering a broad range of countries between 1980 and 2015, show that a more equal distribution of education contributes significantly to reducing income inequality. Educational expansion is a major factor in reducing educational inequality and thus income inequality. Public policies that improve social benefits and price stability contribute to reducing income inequality, while public spending on education helps to reduce educational inequality. In contrast, higher per capita income, greater openness to international trade, and faster technological progress tend to make both income and education distribution more unequal. Using the calibration of empirical results, we find that we can attribute the rising income inequality within East Asian economies in recent decades to the unequalizing effects of fast income growth and rapid progress in globalization and technological change, which have surpassed the income-equalizing effects from improved equality in the distribution of educational attainment during the period.
Citation
Lee, Jong-Wha; Lee, Hanol. 2018. Human Capital and Income Inequality. © Asian Development Bank Institute. http://hdl.handle.net/11540/7909.Keywords
Income Distribution
Demographic Indicators
Social Justice
Price stabilization
Food prices
Price policy
Development Indicators
Environmental Indicators
Economic Indicators
Educational Indicators
Demographic Indicators
Health Indicators
Disadvantaged Groups
Low Income Groups
Socially Disadvantaged Children
Poverty Analysis
Participatory Poverty Assessment
Poverty Reduction Strategy
Extreme Poverty
Economic development
Growth And Poverty
Macroeconomic
Macroeconomic Analysis
Macroeconomic Framework
Macroeconomic Models
Macroeconomic Performance
Macroeconomic Planning
Macroeconomic Policies
Macroeconomic Reform
Macroeconomic Stabilization
Social change
Social accounting
Inequality of income
Economic growth
Qualilty of Life
Open price system
Price fixing
Price regulation
Consumer price indexes
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