Educational Qualifications and Wage Inequality: Evidence for Europe

Budria, Santiago and Telhado-Pereira, Pedro (2005): Educational Qualifications and Wage Inequality: Evidence for Europe.

Abstract

This paper explores the connection between education and wage inequality in nine European countries. We exploit the quantile regression technique to calculate returns to lower secondary, upper secondary and tertiary education at different points of the wage distribution. We find that in most countries returns to tertiary education are highly increasing when moving from the lower to the upper quantiles. This finding suggests that an educational expansion towards tertiary education is expected to increase overall within-groups inequality in Europe. In turn, returns to secondary education are quite homogeneous across quantiles, suggesting that an educational expansion towards secondary education is expected to have only a limited impact on within-groups dispersion. Using data from the last decades, we describe changes in the conditional wage distribution of the surveyed countries. A common feature in Europe is that over the last years wage dispersion increased within the high educated.

• Item Type: MPRA Paper
• Language: English
• Keywords: Returns to education; Quantile regression; Wage inequality
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C29 - Other; D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions

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