The Uncertainty of Academic Rent and Income Inequality: The OECD Panel Evidence

Kosta Josifidis and Novica Supic

Journal of Economic Issues, 2019, vol. 53, issue 2, 394-402

Abstract: The article presents an alternative view on the education—income inequality relationship, which calls into question the neoclassical claim that education increases labor productivity and hence contributes to a higher output, wage and consequently more even income distribution. In the context of public policies, education needs to be seen not only as a factor of income mobility, but also as a “positional good,” which benefits graduates at the expense of non-graduates. Education generates “academic rent,” by which we mean uneven remuneration of workers based on academic signs of distinctions that do not necessarily reflect differences in productivity. Using the robust panel model on a sample of OECD (Organization of Economic Co-operation and Development) countries from 1980 to 2015, we show that investments in human capital lead to lower inequality, but overinvestments tends to increase income inequality, which may be related to academic rent. In discussing this result, we consider that uncertainty of academic rent under the condition of a rapid transformation of the workplace caused by the fourth industrial revolution.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/00213624.2019.1594521 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:jeciss:v:53:y:2019:i:2:p:394-402

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MJEI20

DOI: 10.1080/00213624.2019.1594521

Access Statistics for this article

More articles in Journal of Economic Issues from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().