Education stock and its implication for income inequality: The case of Asian economies

This study develops a quadratic relationship between education and income inequality among Asian developing economies for the period from 1960 to 2015. Panel cointegration and fully modified OLS is applied for the estimation of long‐run coefficients. The results show that initial, primary, secondary...

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Bibliographic Details
Published in:Review of development economics 2019-05, Vol.23 (2), p.1050-1066
Main Authors: Arshed, Noman, Anwar, Awais, Hassan, Muhammad Shahid, Bukhari, Samra
Format: Article
Language:English
Subjects:
Economic models
education—income inequality Kuznets curve
Income inequality
panel cointegration
panel FMOLS
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Summary:This study develops a quadratic relationship between education and income inequality among Asian developing economies for the period from 1960 to 2015. Panel cointegration and fully modified OLS is applied for the estimation of long‐run coefficients. The results show that initial, primary, secondary, and tertiary enrollment increases inequality. However, the effect of education on income inequality becomes negative after a certain threshold level (i.e., 97.5% for primary, 43.5% for secondary, and 11% for tertiary). Thus, this result proves the Kuznets phenomenon of an inverted U‐shape relationship for primary, secondary, and tertiary enrollments.
ISSN:1363-6669
1467-9361
DOI:10.1111/rode.12585