Working Paper 343 - How does educational inequality affect income inequality in Africa ?

Tiguene Nabassaga (), Chuku Chuku, Adamon N. Mukasa () and Hammed Amusa ()
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Tiguene Nabassaga: HEC Montreal, https://www.hec.ca/
Adamon N. Mukasa: African Development Bank, https://www.afdb.org/en
Hammed Amusa: African Development Bank, https://www.afdb.org/en

Working Paper Series from African Development Bank

Abstract: TWe analyze how reducing inequality in access and returns to education would affect income and wealth inequality in Africa. We estimate wealth returns to education and wealth inequality for 37 African countries using multiple waves of living standard measurement surveys from 1987 to 2016. Our analysis reveals a significant gap in the access and post-graduate earning opportunity between the bottom 40 percentile and the higher 40 percentile. A decrease in this gap is significantly correlated with a higher pace of wealth inequality reduction. We support this result with a household-level investigation of how education improves social mobility with better-earning opportunity. The results confirm that education is one of the keydrivers of social mobility, but its effect is not uniform across income groups and may partially explain the gap.

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Date: 2020-11-27
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Persistent link: https://EconPapers.repec.org/RePEc:adb:adbwps:2469

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