The aim of this paper is to evaluate the role of formal education in generating personal earnings and the relationship between income inequality and returns to education in Europe. The comparative analysis, carried out in a longitudinal perspective, involves 26 countries in the light of the main characteristics of their schooling systems, labour markets and redistributive policies. The potential of balanced micro-panel is exploited by random effect models through which returns are estimated for different educational levels; then, the analysis of Gini (ANOGI) assesses the contribution of each educational group to the overall income inequality and the degree to which each sub-population is stratified. It emerges a large distance between returns to investment associated to different levels of education, mainly for the more-unequal countries of Southern and Eastern Europe. Higher returns are usually associated with greater income inequalities, even though this association is not causation. The quite high share of within-level inequality for the most countries and the low degree of overlapping for each educational group confirm the heterogeneity in the effects of education on earnings disparities.

Education, Income inequality and Stratification: Insight into Europe in the Years of Economic Crisis

CASTELLANO, Rosalia;MANNA, ROSALBA;PUNZO, Gennaro
2014

Abstract

The aim of this paper is to evaluate the role of formal education in generating personal earnings and the relationship between income inequality and returns to education in Europe. The comparative analysis, carried out in a longitudinal perspective, involves 26 countries in the light of the main characteristics of their schooling systems, labour markets and redistributive policies. The potential of balanced micro-panel is exploited by random effect models through which returns are estimated for different educational levels; then, the analysis of Gini (ANOGI) assesses the contribution of each educational group to the overall income inequality and the degree to which each sub-population is stratified. It emerges a large distance between returns to investment associated to different levels of education, mainly for the more-unequal countries of Southern and Eastern Europe. Higher returns are usually associated with greater income inequalities, even though this association is not causation. The quite high share of within-level inequality for the most countries and the low degree of overlapping for each educational group confirm the heterogeneity in the effects of education on earnings disparities.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11367/31461
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