Human capital and income inequality*

Jong Wha Lee, Hanol Lee

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)

Abstract

This study investigates empirically how human capital, measured by educational attainment, is related to income distribution. The regressions, using a cross-country data between 1980 and 2015, show that a more equal distribution of education contributes significantly to reducing income inequality. Educational expansion is a major factor in reducing educational inequality and thus income inequality. Social benefits spending and price stability contribute to reducing income inequality, while public education spending helps to reduce educational inequality. In contrast, higher per capita income, greater trade openness and faster technological progress tend to make both income and education distribution more unequal. The calibration of empirical results shows that we can attribute the rising income inequality within East Asian economies in recent decades to the unequalizing effects of fast income growth and rapid progress in globalization and technological change, which have surpassed the income-equalizing effects from improved equality in the distribution of educational attainment.

Original languageEnglish
Pages (from-to)554-583
Number of pages30
JournalJournal of the Asia Pacific Economy
Volume23
Issue number4
DOIs
Publication statusPublished - 2018 Oct 2

Keywords

  • Income distribution
  • education
  • globalization
  • human capital
  • inequality
  • technological change

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development
  • Political Science and International Relations

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