Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/126349
Authors: 
Lam, David
Finn, Arden
Leibbrandt, Murray
Year of Publication: 
2015
Series/Report no.: 
WIDER Working Paper 2015/050
Abstract: 
Human capital models imply that both the distribution of education and returns to education affect earnings inequality. Decomposition of these 'quantity' and 'price' components have been important in understanding changes in earnings inequality in developed and developing countries. This paper provides theoretical and empirical analysis of the interactions between schooling inequality, returns to schooling and earnings inequality. We focus on two main questions. What is the relationship between inequality in schooling and inequality in earnings? How do changes in returns to schooling affect earnings inequality when returns differ by schooling level? We derive new analytical results that are used to guide empirical analysis of changes in earnings inequality in Brazil and South Africa. While both countries have had declines in schooling inequality, only Brazil has translated those into declines in earnings inequality. In South Africa, rising returns to schooling at the top level have offset equalizing changes in the schooling distribution.
Subjects: 
schooling inequality
earnings inequality
returns to education
JEL: 
I24
I26
ISBN: 
978-92-9230-939-8
Document Type: 
Working Paper

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