Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203021
Authors: 
Weisstanner, David
Armingeon, Klaus
Year of Publication: 
2018
Series/Report no.: 
LIS Working Paper Series 735
Abstract: 
What explains the large cross-country variation in the wage premium for higher education? Economic analyses of wage differentials by education point to technological change and globalisation, but we know little about the impact of different types of public policies. We argue that public education spending and tax-transfer policies contain the spread of 'education premiums' through material incentives (decommodification) and attitudinal responses, i.e. changing attitudes towards education premiums and the motivation to request a maximum return on individual investment in education. The empirical analysis relies on a new dataset of education premiums constructed from Luxembourg Income Study microdata, covering 22 OECD countries between 1989 and 2014. We provide evidence that taxation levels and public education spending particularly affect education premium levels and changes within countries. For the literature on income inequality, these findings imply the need to pay attention more systematically to redistributive policies shaping the 'market' distribution of incomes.
Subjects: 
wages
inequality
education
public policy
redistribution
JEL: 
I24
I26
I38
Document Type: 
Working Paper
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