Location of Repository

Education and income inequality in the regions of the European Union

By Andrés Rodríguez-Pose and Vassilis Tselios

Abstract

This paper provides an empirical study of the determinants of income inequality across regions of the EU. Using the European Community Household Panel dataset for 102 regions over the period 1995-2000, it analyses how microeconomic changes in human capital distribution affect income inequality for the population as a whole and for normally working people. The different static and dynamic panel data analyses conducted reveal that the relationship between income per capita and income inequality, as well as between a good human capital endowment and income inequality is positive. High levels of inequality in educational attainment are also associated with higher income inequality. The above results are robust to changes in the definition of income distribution and may be interpreted as a sign of the responsiveness of the EU labor market to differences in qualifications and skills. Other results indicate that population ageing, female participation in the labor force, urbanization, agriculture, and industry are negatively associated to income inequality, while unemployment and the presence of a strong financial sector positively affect inequality. Finally, income inequality is lower in social-democratic welfare states, in Protestant areas, and in regions with Nordic family structures

Topics: HC Economic History and Conditions, L Education (General)
Publisher: Spatial Economics Research Centre (SERC), London School of Economics and Political Science
Year: 2008
OAI identifier: oai:eprints.lse.ac.uk:33188
Provided by: LSE Research Online

Suggested articles

Preview

Citations

  1. (2002). A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," doi
  2. (1979). A Theory of Income Distribution. doi
  3. (1996). A Theory of Persistent Income Inequality," doi
  4. (2002). Achieving Education for All by 2015: Simulation Results for 47 Low-Income Countries," Washington, DC: Human Development Network, Africa Region and Education Department,
  5. (1998). Addressing the Education Puzzle: The Distribution of Education and Economic Reforms. doi
  6. (2005). Agglomeration and the Adjustment of the Spatial Economy," doi
  7. an independent research centre funded by the Economic and Social Research Council (ESRC), Department for Business, Enterprise and Regulatory Reform (BERR), the Department for Communities and Local Government (CLG) and the Welsh Assembly Government.
  8. (1995). Another Look at the Instrumental Variable Estimation of Error-Components Models," doi
  9. (2003). Basic Econometrics. doi
  10. (2000). Does Educational Achievement Help to Explain Income Inequality?," Departmental Working doi
  11. (2005). Does Income Distribution Affect U.S State Economic Growth?," doi
  12. (2005). Econometric Analysis of Panel Data. doi
  13. (1955). Economic Growth and Income Inequality," doi
  14. (1998). Economic Inequality and Income Distribution. Cambridge [England]; New York:
  15. (2002). Economic Inequality and Its Socioeconomic Impact," doi
  16. (1966). Economics of Education and Distribution of Earnings,"
  17. (2004). Education and Economic Performance: Simplistic Theories and Their Policy Consequences," doi
  18. (2002). Education and Income Inequality: New Evidence from Cross-Country Data," Review of Income and Wealth, doi
  19. (2005). Education, Migration, and Job Satisfaction: The Regional Returns of Human Capital in the E.U," doi
  20. (1996). Educational Expansion and Educational Inequality on Income Distribution," doi
  21. (1983). Educational Expansion and the Kuznets Effect,"
  22. (1995). Efficient Estimation of Models for Dynamic Panel Data," doi
  23. (1981). Estimation of Dynamic Models with Error Components," doi
  24. (1999). Explaining Inequality the World Round: Cohort Size, Kuznets Curves, and Openness," doi
  25. (1975). Income Distribution: Analysis and Policies. doi
  26. (1997). Income Inequality in the Philippines, 1961-91," doi
  27. (1976). Inequality, Poverty and Development," doi
  28. (1991). Inequality, Poverty, and History: The Kuznets Memorial Lectures of the Economic Growth Center, Yale University. doi
  29. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," doi
  30. (1962). Investment in Human Capital - a Theoretical Analysis," doi
  31. (1958). Investment in Human Capital and Personal Income Distribution," doi
  32. (1961). Investment in Human Capital," doi
  33. (2007). Is Income Inequality Harmful for Regional Growth? Evidence from the European Union," doi
  34. (1973). Job Market Signaling," doi
  35. (1982). Large Sample Properties of Generalized Method of Moments Estimators," doi
  36. (2007). Mapping Regional Personal Income Distribution in Western Europe: Income Per Capita and Inequality," Working Paper, Dynamic Regions in a Knowledge-Driven Global Economy: Lessons and Policy Implications for the EU.
  37. (2002). Mobility, Opportunity, and Vulnerability: The Dynamics of Poverty and Inequality in a Global Economy," doi
  38. (2005). Mortality, Human Capital and Persistent Inequality," doi
  39. (1998). Redistribution and the Persistence of Income Inequality." Working Paper, John F. Kennedy School of Government,
  40. (1962). Reflections on Investment in Man,"
  41. (2007). Regional Earnings Inequality in Great Britain: Evidence from Quantile Regressions," doi
  42. (1996). Simple Diagnostic Tests for Spatial Dependence," doi
  43. (1995). Small Sample Properties of Tests for Spatial Dependence in Regression Models," doi
  44. (2004). Social Europe: Living Standards and Welfare States.
  45. (1991). Some Tests of Specification for Panel Data -Monte-Carlo Evidence and an Application to Employment Equations," doi
  46. (1988). Spatial Econometrics: Methods and Models. doi
  47. (1981). Spatial Processes: Models & Applications. doi
  48. (2003). Specification and Estimation of Spatial Panel Data Models," doi
  49. (1978). Specification Tests in Econometrics," doi
  50. (1999). Structural Unemployment, Cyclical Unemployment, and Income Inequality," doi
  51. (2007). Struggles with Survey Weighting and Regression Modeling," doi
  52. (1997). Technological Progress, Mobility, and Economic Growth," doi
  53. (1996). The “Southern Model” of Welfare in Social Europe," doi
  54. (2005). The Divergence of Human Capital Levels across Cities," Papers in doi
  55. (2004). The Economics of the Welfare State. Oxford: doi
  56. (1958). The Estimation of Economic Relationships Using Instrumental Variables," doi
  57. (2001). The Global City: doi
  58. (1997). The Kuznets Curve and the Great UTurn: Income Inequality in U.S Countries, doi
  59. (1993). The Kuznets Process and the Inequality Development Relationship," doi
  60. (1980). The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics," doi
  61. (2003). The New Geography of Global Income Inequality. doi
  62. (2003). The Returns to Education: Macroeconomics," doi
  63. (1990). The Three Worlds of Welfare Capitalism. doi
  64. (1990). Time-Series and Cross-Sectional Estimates on Panel Data: Why Are They Different and Why They Should Be Equal,"
  65. (1999). U.S Regional Income Convergence: A Spatial Econometric Perspective," doi
  66. (1985). Unequal Organizations or Unequal Attainments - an Empirical Comparison of Sectoral and Individualistic Explanations for Aggregate Inequality," doi
  67. (2006). Why Has Income Inequality in Thailand Increased? An Analysis Using Surveys from 1975 to 1998," Japan and the World Economy, doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.