Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries

Pedro Pereira and Pedro Martins

No 120, IZA Discussion Papers from IZA Network @ LISER

Abstract: 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.

Keywords: education systems; ability; quantile regressions; labour-market institutions; Returns to education; earnings inequality (search for similar items in EconPapers)
JEL-codes: C29 D31 I21 J24 J31 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2000-02
New Economics Papers: this item is included in nep-edu, nep-lab and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

Published - published in: Labour Economics, 2004, 11 (3), 355-371

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Related works:
Working Paper: Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries (2002)
Working Paper: Does education reduce wage inequality? Quantile regressions evidence from fifteen European countries (2000)
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