Income Inequality and Education
Published Aug 26, 2015 · R. Breen, Inkwan Chung
Sociological Science
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Abstract
Many commentators have seen the growing gap in earnings and income between those with a college education and those without as a major cause of increasing inequality in the United States and elsewhere. In this article we investigate the extent to which increasing the educational attainment of the US population might ameliorate inequality. We use data from NLSY79 and carry outathree-leveldecompositionoftotalinequalityintowithin-person, between-personandbetween- education parts. We find that the between-education contribution to inequality is small, even when weconsideronlyadjustedinequalitythatomitsthewithin-personcomponent. Wecarryoutanumber of simulations to gauge the likely impact on inequality of changes in the distribution of education and of a narrowing of the differences in average incomes between those with different levels of education. We find that any feasible educational policy is likely to have only a minor impact on income inequality.