Human capital inequality and income inequality: testing for causality

Muhammad Chani, Sajjad Jan, Zahid Pervaiz and Amatul Chaudhary

Quality & Quantity: International Journal of Methodology, 2014, vol. 48, issue 1, 149-156

Abstract: This study investigates the causal relationship between human capital inequality and income inequality in case of Pakistan. The annual time series data ranging from 1973 to 2009 is used for econometric analysis. Johanson co-integration and Granger Causality tests are used to confirm the existence of long run relationship and the causal relationship between human capital inequality and income inequality. The results indicate that there is positive relationship between the two types of inequalities in the long run. The estimates of causality test indicate that income inequality causes the human capital inequality but human capital inequality does not cause income inequality. Policy initiatives to reduce income inequality may empower people economically to avail skill building opportunities and accumulate their human capital through access to educational services. Copyright Springer Science+Business Media B.V. 2014

Keywords: Inequality; Human capital; Income education; Cointegration; Causality (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:spr:qualqt:v:48:y:2014:i:1:p:149-156

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DOI: 10.1007/s11135-012-9755-7

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