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Education Expansion, Income Inequality and Structural Transformation

Evidence From OECD Countries

Bibliographic Data

ID2064429
AuthorsYousef Makhlouf (0000-0001-7737-3153, Nottingham Trent University), Christopher Lalley (0000-0002-7657-986X, Nottingham Trent University)
Year2023
Volume169
Issue1-2
Pages255-281
Publication date2023-09-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueSocial Indicators Research (JOURNAL)
Journal identifiersISSN: 0303-8300 • E-ISSN: 1573-0921
PublisherSpringer Science and Business Media LLC (PUBLISHER)
DOI10.1007/s11205-023-03161-2
OpenAlexW4382794107
LanguageEN
Citations received4
References cited50

We study the relationship between educational inequality, income inequality and economic transformation using data of 20 OECD countries from 1870 to 2016. Our results show that educational expansion policies increase income inequality in the long run, while having no significant effect on the short run. The structural transformation suggested by Kuznets (1955) explains this potentially counter intuitive result, where contemporary policy, given its focus on the importance of increasing participation and expanding education, must be predicated on the notion that education expansion should decrease income inequality. We quantify the impact of educational inequality on employment in different sectors and find that education expansion promotes the structural transformation towards a higher wage disparity sector. Particularly, expanding education increases the employment in the service sector and reduces the employment in the agriculture sector. Overall, our findings suggest that educational expansion policies play an important role in economic development via promoting the structural transformation, though this leads to higher income inequality. That education expansion is ineffective in reducing income inequality, and instead exacerbates it in the long run, requires significant policy revision despite the popularity of such policies

Demographic economics · Development economics · Economic inequality · Economics · Income distribution · Income inequality metrics · Inequality · Labour economics · Economic Growth and Productivity · Income, Poverty, and Inequality · Intergenerational and Educational Inequality Studies

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Unique citing works4
Citations per year4
Citation span2025 - 2026 (2)
Citation velocitycurrent
Highly citedNo
Citation typesNeutral: 4

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