Does education reduce wage inequality? Quantile regression evidence from 16 countries (original) (raw)

Education and wage inequality in Europe

2011

In this paper we apply a quantile regression (QR) approach to the EU-SILC data set, in order to explore the connection between education and wage inequality in eight European countries. Our results corroborate the positive relation between wage increase and education and it holds true across the whole distribution. This effect is generally stronger at the highest quantiles of the distribution than at the lowest, implying that schooling increases wage dispersion. This evidence is found to be rather robust like the applied tests of linear hypothesis show.

Educational Qualifications and Wage Inequality: Evidence for Europe

IZA Discussion Paper No. 1763, 2005

Educational Qualifications and Wage Inequality: Evidence for Europe * This paper explores the connection between education and wage inequality in nine European countries. We exploit the quantile regression technique to calculate returns to lower secondary, upper secondary and tertiary education at different points of the wage distribution. We find that returns to tertiary education are highly increasing when moving from the lower to the upper quantiles. This finding suggests that an educational expansion towards tertiary education is expected, ceteris paribus, to increase overall wage inequality through the withindimension. Returns to secondary education are more homogeneous across quantiles, thus suggesting that an educational expansion towards secondary education is expected to have a more limited impact on within-groups dispersion. Using data from the last decades, we assess how the impact of education on wage inequality has evolved over time. We detect different trends across countries. A common feature is that the inequality increasing effect of tertiary education became more acute over the last years.

THE DISTRIBUTIVE EFFECTS OF EDUCATION: AN UNCONDITIONAL QUANTILE REGRESSION APPROACH

Revista de análisis económico, 2014

We use recent unconditional quantile regression methods (UQR) to study the distributive effects of education in Argentina. Standard methods usually focus on mean effects, or explore distributive effects by either making stringent modeling assumptions, and/or through counterfactual decompositions that require several temporal observations. An empirical case shows the flexibility and usefulness of UQR methods. Our application for the case of Argentina shows that education contributed positively to increased inequality in Argentina, mostly due to the effect of strongly heterogeneous effects of education on earnings.

Returns to Schooling in Europe: Evidence From Quantile Regression on EU-SILC Data

Journal of Knowledge Management Economics and Information Technology, 2012

In this paper the effects of schooling on wage inequality across a group of European countries are examined. Using the latest available EU-SILC dataset, a positive relation between these two variables is found across the whole distribution by means of a quantile regression (QR) approach. Such effect is stronger effect at the highest quantiles than at the lowest. This result corroborates the possibility of an increase in the wage dispersion when higher educational attainments are achieved and it is found to be rather robust as showed by linear hypothesis tests. Finally, the country-specific results highlight that the OLS technique misleads relevant information over crosscountries heterogeneity in the impact of education on within group inequality at different points of the wage distribution compared to the QR approach.

Schooling, Wage Risk and Inequality

2014

Abstract: We analyse the dispersion of returns to education at sixteen Western countries during the mid-nineties by running quantile regressions of Mincer equations, with a view to addressing the link between schooling and wage risk and within-levels inequality. We find a stylised fact: returns to schooling increase over the wage distribution in an overwhelming majority of countries. Moreover, our cross-country analysis suggests that average returns are positively correlated to the education-related wage risk. These findings are consistent with the existence of over-education and/or of a positive interaction between ability and schooling. Overall, they cast some doubts on the inequality-reducing scope attributed to schooling.

Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis

Review of Development Economics, 2012

This paper investigates the male wage inequality and its evolution over the 1994–2002 period in Turkey by estimating Mincerian wage equations using ordinary least squares and quantile regression techniques. Male wage inequality is high in Turkey. While it declined at the lower end of the wage distribution it increased at the top end of wage distribution. Education contributed to higher wage inequality through both within and between dimensions. The within-groups inequality increased and between-groups inequality decreased over the study period. The latter factor may have dominated the former contributing to the observed decline in the male wage inequality over the 1994–2002. Further results are provided for the wage effects of experience, public sector employment, geographic location, firm size, industry of employment and their contribution to wage inequality. Recent increases in foreign direct investiment inflows, openness to trade and global technological developments are discussed as contributing factors to the recent rising within-groups wage inequality.

Overeducation and Wages in Europe: Evidence from Quantile Regression

La literatura existente ha asumido que el efecto de la sobre-educación es constante a lo largo de la distribución condicional de salarios. En este artículo usamos la regresión cuantílica con datos de 12 países europeos para mostrar que las diferencias entre los segmentos de la distribución de los hechos son grandes. Sobretodo, analizamos hasta qué punto la sobre-educación está relacionada con la falta de habilidades.

Wage inequality and returns to schooling in Europe: a semi-parametric approach using EU-SILC data

2009

In this paper we apply a semi-parametric approach (quantile regression -QR) to the last 2007 wave of the EU-SILC data set, in order to explore the connection between education and wage inequality in 8 European countries. We find that wages increase with education and this holds true across the whole distribution. Furthermore, this effect is generally more important at the highest quantiles of the distribution than at the lowest, implying that schooling increases wage dispersion. This evidence is found to be rather robust as showed through tests of linear hypothesis. We also corroborate the idea that, although OLS coefficients estimates are substantially in line with the QR's, the former technique really misleads relevant information about cross-countries heterogeneity in the impact of education on within group inequality at different points of the wage distribution. Hence this paper confirms that a semi-parametric QR approach is more interesting, as well as more appropriate, because it measures the wage effect of education at different quantiles, thus describing relevant cross-countries changes or bounces not only in the location, but also in the shape of the distribution.