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Education, Economic Growth and Measured Income Inequality

Rehme, Günther (2006):
Education, Economic Growth and Measured Income Inequality.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Online-Edition: http://econstor.eu/bitstream/10419/32057/1/511220340.PDF],
[Report]

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 which 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 viewed as approximations may still provide important information on the nonlinear relationship between growth and education.

Item Type: Report
Erschienen: 2006
Creators: Rehme, Günther
Title: Education, Economic Growth and Measured Income Inequality
Language: English
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 which 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 viewed as approximations may still provide important information on the nonlinear relationship between growth and education.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 163
Place of Publication: Darmstadt
Uncontrolled Keywords: Keywords: Education, Growth, Inequality, Policy
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Economic Theory
Date Deposited: 20 Nov 2008 08:22
Official URL: http://econstor.eu/bitstream/10419/32057/1/511220340.PDF
Additional Information:

JEL Classification: O4, I2, D31, H2

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