Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries

57 Pages Posted: 10 Sep 2000

See all articles by Pedro Telhado Pereira

Pedro Telhado Pereira

Universidade da Madeira - Gestao e Economica; IZA Institute of Labor Economics

Pedro S. Martins

New University of Lisbon; IZA Institute of Labor Economics; Global Labor Organization (GLO)

Date Written: February 2000

Abstract

We address the impact of education upon wage inequality by drawing on evidence from fifteen European countries, during a period ranging between 1980 and 1995. We focus on within-educational-levels wage inequality by estimating quantile regressions of Mincer equations and analysing the differences in returns to education across the wage distribution and across time. Four different patterns emerge: 1) a positive and increasing contribution of education upon within-levels wage inequality - the case of Portugal; 2) a positive but stable role of education in terms of inequality - Austria, Finland, France, Ireland, Netherlands, Norway, Spain, Sweden, Switzerland, UK; 3) a neutral role - Denmark and Italy; and 4) a negative impact - Germany and Greece. We thus find that in most countries dispersion in earnings increases with educational levels and that education is a risky investment. These results suggest a positive interaction between schooling and ability with respect to earnings.

JEL Classification: C29, D31, I21, J24, J31

Suggested Citation

Telhado Pereira, Pedro and Martins, Pedro S., Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries (February 2000). Available at SSRN: https://ssrn.com/abstract=224218 or http://dx.doi.org/10.2139/ssrn.224218

Pedro Telhado Pereira (Contact Author)

Universidade da Madeira - Gestao e Economica ( email )

Campus Universitario da Penteada
9000-390 Funchal
Portugal
351 291 70 50 40 (Phone)
351 291 70 50 43 (Fax)

HOME PAGE: http://www.uma.pt/Privado/ppereira

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Pedro S. Martins

New University of Lisbon

Lisbon, 1099-085
Portugal

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Global Labor Organization (GLO) ( email )

Collogne
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
691
Abstract Views
4,106
rank
48,047
PlumX Metrics