The Determinants of Income Inequality: The Role of Education

Anna Hovhannisyan, Ramon Castillo-Ponce, Rolando Valdez


The economics literature reports mixed evidence on the importance of education as a determinant of income inequality. In this document we shed light on the debate by testing this relationship for a sample of developing and developed countries from 1990 to 2014. We control for country specific characteristics including trade openness, unemployment, foreign direct investment, and the share of elderly population. The results of robust panel data estimations unequivocally find that education is negatively and significantly associated with income inequality.


education; income inequality; robust estimation.

JEL Codes

O1; O15; O57.

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