Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries
Universidade Nova de Lisboa, Faculdade de Economia, FEUNL Working Paper Series No. 379
57 Pages Posted: 10 Sep 2000
Date Written: February 2000
We address the impact of education upon wage inequality by drawing on evidence from fifteen European countries, during a period ranging between 1980 and 1995. We focus on within-educational-levels wage inequality by estimating quantile regressions of Mincer equations and analysing the differences in returns to education across the wage distribution and across time. Four different patterns emerge: 1) a positive and increasing contribution of education upon within-levels wage inequality - the case of Portugal; 2) a positive but stable role of education in terms of inequality - Austria, Finland, France, Ireland, Netherlands, Norway, Spain, Sweden, Switzerland, UK; 3) a neutral role - Denmark and Italy; and 4) a negative impact - Germany and Greece. We thus find that in most countries dispersion in earnings increases with educational levels and that education is a risky investment. These results suggest a positive interaction between schooling and ability with respect to earnings.
JEL Classification: C29, D31, I21, J24, J31
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