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Abstract for:

Education and Income Inequality in the Regions of the European Union

Andrés  Rodríguez-Pose,  Vassilis  Tselios,  November 2008
Paper No' SERCDP0011: | Full paper (pdf)
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Keywords: income inequality; educational attainment, educational inequality, regions, Europe

JEL Classification: D31; I21; O15; O18

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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Abstract:

This paper provides an empirical study of the determinants of income inequality across regions of the EU. Using the European Community Household Panel dataset for 102 regions over the period 1995-2000, it analyses how microeconomic changes in human capital distribution affect income inequality for the population as a whole and for normally working people. The different static and dynamic panel data analyses conducted reveal that the relationship between income per capita and income inequality, as well as between a good human capital endowment and income inequality is positive. High levels of inequality in educational attainment are also associated with higher income inequality. The above results are robust to changes in the definition of income distribution and may be interpreted as a sign of the responsiveness of the EU labor market to differences in qualifications and skills. Other results indicate that population ageing, female participation in the labor force, urbanization, agriculture, and industry are negatively associated to income inequality, while unemployment and the presence of a strong financial sector positively affect inequality. Finally, income inequality is lower in social-democratic welfare states, in Protestant areas, and in regions with Nordic family structures.