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Educational Inequality, Income Inequality and Economic Growth Causality Spiral

Year 2026, Volume: 11 Issue: 1, 67 - 98, 28.02.2026
https://doi.org/10.25229/beta.1660098
https://izlik.org/JA66UP32DN

Abstract

The main purpose of this study is to present the literature measuring the effect of educational inequality on income inequality and economic growth to determine the causality status between the variables in developing countries through BRICS-T countries. While these variables are generally addressed at the level of bilateral relations in the literature, this study offers an original contribution by analyzing the tripartite structure in a holistic manner. For this purpose, annual data between 2010-2022 were employed, the Driscoll-Kraay Standard Error Estimator was used to determine the correlation relationship between the variables, and the panel causality method developed by Dumitrescu and Hurlin was used to determine the causality relationship. In the study, while the Gini index of income was used as a measure of income inequality, the Gini index of education was used as a measure of educational inequality and real income per capita as a measure of economic growth. The obtained results revealed the unidirectional causality from educational inequality to income inequality, the unidirectional causality from economic growth to educational inequality and the unidirectional causality from economic growth to income inequality. This result reveals a kind of causality spiral between education inequality, income inequality and economic growth. These results reveal that structural inequalities in education deepen income inequality and that economic growth is insufficient to eliminate existing inequalities. In addition, the study presents various policy implications to emphasize the importance of equal income distribution and educational equality.

References

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  • Arshed, N., Anwar, A., Hassan, M.S. & Bukhari, S. (2019). Education stock and its implication for income inequality: the case of Asian economies, Review of Development Economics, 23(2), 1050-1066.
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  • Baliamoune-Lutz, M. & McGillivray, M. (2009). Does gender inequality reduce growth in SubSaharan Africa and Arab countries?, African Development Review, 21(2), 224-242.
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  • Dumitrescu, E. I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460.
  • Duncan, G. J. & Murnane, R.J. (2011) The American Dream, Then and Now. In: Duncan, G.J. and Murnane, R.J., Eds., Whither Opportunity? Rising Inequality, Schools, and Children’s Life, Russell Sage Foundation, New York, 3-23.
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  • Ezeh K. (2020). Gender inequality in education and economic growth. Available at: http://hj.divaportal.org/smash/get/diva2:1447860/FULLTEXT01.pdf
  • Galor, O., & Moav, O. (2004). From physical to human capital accumulation: Inequality and the process of development. Review of Economic Studies, 71(4), 1001-1026.
  • Göçer, İ. (2013). Ar-Ge Harcamalarının Yüksek Teknolojili Ürün İhracatı, Dış Ticaret Dengesi ve Ekonomik Büyüme Üzerindeki Etkileri. Maliye Dergisi, 215-240.
  • Gregorio, J. D. & Lee, J. W. (2002). Education and income inequality: new evidence from crosscountry data. Review of Income and Wealth, 48(3), 395-416.
  • Güneri, B. (2024). Beşeri Sermaye Eşitsizliği ve Büyüme Arasındaki İlişkinin Değerlendirilmesi. Çankırı Karatekin Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 15(2), 423-444.
  • Halter D., M. Oechslin, & Zweimüller, J. (2014). Inequality and growth: The neglected time dimension, J. Econ. Growth, 19(1), 81–104.
  • Ibourk, A. & Amaghouss, J. (2013). Inequality in education and economic growth: empirical investigation and foundation – evidence from Mena region. International Journal of Economics and Finance, 5(2), 111-124.
  • Ismail, R. & Yussof, I. (2010). Human capital and income distribution in Malaysia: a case study. Journal of Economics Cooperation and Development, 31(2), 25-46.
  • Joshi, J. M., Dalei, N. N. & Mehta P. (2021). Estimation of gross refining margin of Indian petroleum refineries using Driscoll-Kraay standard error estimator, Energy Policy, 150, 1-12. Doi: 10.1016/j.enpol.2021.112148
  • Kamran, M., Rafique, M. Z., Nadeem, A. M., & Anwar, S. (2023). Does inclusive growth contribute towards sustainable development? Evidence from selected developing countries. Social Indicators Research, 165(2), 409-429.
  • Klasen, S. & Lamanna, F. (2009). The impact of gender inequality in education and employment on economic growth: new evidence for a panel of countries. Feminist Economics, 15(3), 91-132.
  • Klasen, S. (1999). Does Gender Inequality Reduce Growth and Development? World Bank Policy Research Department, Working Paper 7, World Bank: Washington DC
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  • Kuznets, S. (1955). Economic growth and income inequality. American Economic Review. 45(1), 1–28.
  • Lee, V. E. & Smith J. (2001). Restructuring High Schools for Equity and Excellence: What Works. Sociology of Education Series. Teachers College Press, 1234 Amsterdam Avenue, New York, NY 10027.
  • Lin, C. A. (2007). Education expansion, educational inequality, and income inequality: evidence from Taiwan, 1976-2003”, Social Indicators Research, 80(3), 601-615.
  • Lopez, R., Thomas, V., & Wang, Y. (1998). Addressing the Education Puzzle. The Distribution of Education and Economic Reform. World Bank Policy Research Working Paper no.2031.
  • Majeed, M. T. (2016). Economic growth and income inequality nexus: an empirical analysis for Pakistan, Kashmir Econ. Rev. 25(1), 1–12.
  • Marin, A. & Psacharopoulos, G. (1976). Schooling and income distribution. The Review of Economics and Statistics, 58(3), 332-338.
  • Marrero, G. A. & Servén, L. (2022). Growth, inequality and poverty: a robust relationship? Empirical Economics, 63, 725– 791. https://doi.org/10.1007/s00181-021-02152-x
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  • Mesa, E.P. (2007). Measuring education inequality in the Philippines. The Philippines Review of Economics, 44(2), 33-70.
  • Milanovic, B. (2016). Global inequality: A new approach for the age of globalization. Harvard University Press.
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  • Munir, K. & Bukhari, M. (2020). Impact of globalization on income inequality in Asian emerging economies. International Journal of Sociology and Social Policy, 40(2), 44-57.
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Eğitim Eşitsizliği, Gelir Eşitsizliği ve Ekonomik Büyüme Nedensellik Sarmalı

Year 2026, Volume: 11 Issue: 1, 67 - 98, 28.02.2026
https://doi.org/10.25229/beta.1660098
https://izlik.org/JA66UP32DN

Abstract

Bu çalışmanın temel amacı eğitim eşitsizliği, gelir eşitsizliği ve ekonomik büyüme arasındaki ilişkiye dair literatürü ortaya koymak ve BRICS-T ülkeleri özelinde gelişmekte olan ülkelerde değişkenler arasındaki nedensellik durumunu tespit etmektir. Literatürde bu değişkenler genellikle ikili ilişkiler düzeyinde ele alınırken, bu çalışma üçlü yapıyı bütüncül biçimde analiz ederek özgün bir katkı sunmaktadır. Bu amaçla, 2010-2022 yılları arasındaki yıllık bazda veriler istihdam edilmiş olup değişkenler arasındaki bağlanım ilişkisinin tespiti için Driscoll-Kraay Standart Hata Tahmincisi kullanılmış ve nedensellik ilişkisinin tespiti için ise Dumitrescu ve Hurlin tarafından geliştirilen panel nedensellik yöntemi kullanılmıştır. Çalışmada gelir eşitsizliğinin bir ölçüsü olarak gelirin Gini endeksi kullanılırken, eğitimdeki eşitsizliğinin ölçüsü olarak eğitimin Gini endeksi ve ekonomik büyümenin ölçüsü olarak da kişi başı reel gelir kullanılmıştır. Elde edilen sonuçlar; eğitim eşitsizliğinden gelir eşitsizliğine doğru tek yönlü nedenselliği, ekonomik büyümeden eğitim eşitsizliğine doğru tek yönlü nedenselliği ve ekonomik büyümeden gelir eşitsizliğine doğru tek yönlü nedenselliği ortaya koymuştur. Elde edilen bu sonuç eğitim eşitsizliği, gelir eşitsizliği ve ekonomik büyüme arasındaki bir çeşit nedensellik sarmalını ortaya çıkarmaktadır. Bu sonuçlar, eğitimdeki yapısal eşitsizliklerin gelir adaletsizliğini derinleştirdiğini ve ekonomik büyümenin mevcut eşitsizlikleri ortadan kaldırmakta yetersiz kaldığını ortaya koymaktadır. Ayrıca, çalışma gelirin eşit dağılımının ve eğitim eşitliliğinin önemini vurgulamak için çeşitli politika çıkarımları sunmaktadır.

References

  • Abdelbaki, H. H. (2012). An analysis of income inequality and education inequality in Bahrain, Modern Economy, 3(5), 675-685.
  • Aghion, P. & Howitt, P. (1998). Endogenous Growth Theory. Cambridge, MA. MIT
  • Ahluwalia M. S. (1976). Inequality, poverty and development, Journal of Development Economics, 3(4), 307–342.
  • Alam, A., & Mohanty, A. (2023). Cultural beliefs and equity in educational institutions: exploring the social and philosophical notions of ability groupings in teaching and learning of mathematics. International Journal of Adolescence and Youth, 28(1), 2270662.
  • Alesina, A., & Rodrik, D. (1994). Distributive politics and economic growth. Quarterly Journal of Economics, 109(2), 465-490.
  • Amar, S. & Pratama, I. (2020). Exploring the link between income inequality, poverty reduction and economic growth: An ASEAN perspective. International Journal of Innovation, Creativity and Change, 11(2), 24-41.
  • Arshed, N., Anwar, A., Hassan, M.S. & Bukhari, S. (2019). Education stock and its implication for income inequality: the case of Asian economies, Review of Development Economics, 23(2), 1050-1066.
  • Arshed, N., Anwar, A., Kousar, N. & Bukhari, S. (2018). Education enrollment level and income inequality: a case of SAARC economies. Social Indicators Research, 140(3), 1211-1224.
  • Balcilar, M., Gupta, R., Ma, W. & Makena, P. (2021). Income inequality and economic growth: a re-examination of theory and evidence. Review of Development Economics, 25(2), 737–757.
  • Baliamoune-Lutz, M. & McGillivray, M. (2009). Does gender inequality reduce growth in SubSaharan Africa and Arab countries?, African Development Review, 21(2), 224-242.
  • Baliamoune-Lutz, M. & McGillivray, M. (2015). The impact of gender inequality in education on income in Africa and the Middle East. Economic Modeling, 47, 1-11.
  • Barro, R. J. (2000). Inequality and growth in a panel of countries, Journal of Economic Growth, 5(1), 5–32.
  • Barro, R. J., & Lee, J. W. (1993). International Comparisons of Educational Attainment. Journal of Monetary Economics, 32, 363-94. http://dx.doi.org/10.1016/0304-3932(93)90023-9
  • Barro, R. J., & Sala-i-Martin, X. (1995). Technological Diffusion, Convergence and Growth. Economics Working Papers 116, Department of Economics and Business. Universitat Pompeu Fabra, Barcelona.
  • Baye, F. M. & Epo, B. N. (2015). Impact of human capital endowments on inequality of outcomes in Cameroon. Review of Income and Wealth, 61(1), 93-118.
  • Bigsten, A & Levin, J. (2000). Growth, Income Distribution, and Poverty: A Review, Working Paper in Economics, No. 32, Department of Economics, Goteborg University, Goteborg.
  • Birdsall, N., & Londono, J. L. (1997). Asset Inequality Matters: An Assessment of the World Bank’s Approach to Poverty Reduction, American Economic Review, 87, 32-37.
  • Birleşmiş Milletler (2000), United Nations Millennium Declaration, United Nations, New York, NY.
  • Castelló, A. & Doménech, R. (2002). Human Capital Inequality and Economic Growth: Some New Evidence. Economic Journal, 112(478), 187-200. http://dx.doi.org/10.1111/1468-0297.00024
  • Castelló, A. (2010). Inequality and Growth in Advanced Economies: An Empirical Investigation. Journal of Economic Inequality, 8(3), 293-321. http://dx.doi.org/10.1007/s10888-010-9133-4
  • Castelló-Climent, A., & Doménech, R. (2021). Human capital and income inequality revisited. Education Economics, 29(2), 194-212.
  • Chakravarty, S. R. (2015). Inequality, polarization and conflict. Economic Studies in Inequality, Social Exclusion and Well-Being, 12.
  • Chancel, L., Piketty, T., Saez, E. & Zucman, G. (2022). World Inequality Report 2022, World Inequality Lab. https://wir2022.wid.world/
  • Charles, V., Gherman, T., & Paliza, J. C. (2022). The Gini Index: a modern measure of inequality. In modern indices for international economic diplomacy (55-84). Cham: Springer International Publishing.
  • Checchi, D. (2000). Does Educational Achievement Help to Explain Income Inequality? World Institute for Development Economics Research (WIDER) Working Paper Series, No. 208, Helsinki, Finland.
  • Cingano F. (2014). OECD social, employment and migration working papers no. 163, Trends in income inequality and its impact on economic growth, OECD.
  • Connolly, M. (2004). Human capital and growth in the Postbellum South: a separate but unequal story. The Journal of Economic History, 64(2), 363-399.
  • De Gregorio, J. & Lee, J. W. (2002). Education and Income Distribution: New Evidence from Cross-Country Data. Review of Income and Wealth, 48(3), 395-416. http://dx.doi.org/10.1111/1475-4991.00060
  • Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics And Statistics, 80(4), 549-560.
  • Dumitrescu, E. I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460.
  • Duncan, G. J. & Murnane, R.J. (2011) The American Dream, Then and Now. In: Duncan, G.J. and Murnane, R.J., Eds., Whither Opportunity? Rising Inequality, Schools, and Children’s Life, Russell Sage Foundation, New York, 3-23.
  • Dünya Bankası (2024). 17.11.2024 tarihinde erişildi: https://www.worldbank.org/en/topic/girlseducation
  • Ezeh K. (2020). Gender inequality in education and economic growth. Available at: http://hj.divaportal.org/smash/get/diva2:1447860/FULLTEXT01.pdf
  • Galor, O., & Moav, O. (2004). From physical to human capital accumulation: Inequality and the process of development. Review of Economic Studies, 71(4), 1001-1026.
  • Göçer, İ. (2013). Ar-Ge Harcamalarının Yüksek Teknolojili Ürün İhracatı, Dış Ticaret Dengesi ve Ekonomik Büyüme Üzerindeki Etkileri. Maliye Dergisi, 215-240.
  • Gregorio, J. D. & Lee, J. W. (2002). Education and income inequality: new evidence from crosscountry data. Review of Income and Wealth, 48(3), 395-416.
  • Güneri, B. (2024). Beşeri Sermaye Eşitsizliği ve Büyüme Arasındaki İlişkinin Değerlendirilmesi. Çankırı Karatekin Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 15(2), 423-444.
  • Halter D., M. Oechslin, & Zweimüller, J. (2014). Inequality and growth: The neglected time dimension, J. Econ. Growth, 19(1), 81–104.
  • Ibourk, A. & Amaghouss, J. (2013). Inequality in education and economic growth: empirical investigation and foundation – evidence from Mena region. International Journal of Economics and Finance, 5(2), 111-124.
  • Ismail, R. & Yussof, I. (2010). Human capital and income distribution in Malaysia: a case study. Journal of Economics Cooperation and Development, 31(2), 25-46.
  • Joshi, J. M., Dalei, N. N. & Mehta P. (2021). Estimation of gross refining margin of Indian petroleum refineries using Driscoll-Kraay standard error estimator, Energy Policy, 150, 1-12. Doi: 10.1016/j.enpol.2021.112148
  • Kamran, M., Rafique, M. Z., Nadeem, A. M., & Anwar, S. (2023). Does inclusive growth contribute towards sustainable development? Evidence from selected developing countries. Social Indicators Research, 165(2), 409-429.
  • Klasen, S. & Lamanna, F. (2009). The impact of gender inequality in education and employment on economic growth: new evidence for a panel of countries. Feminist Economics, 15(3), 91-132.
  • Klasen, S. (1999). Does Gender Inequality Reduce Growth and Development? World Bank Policy Research Department, Working Paper 7, World Bank: Washington DC
  • Krugman, P. (1994). The myth of Asia’s miracle. Foreign Affairs, 73(6), 62-78.
  • Kuznets, S. (1955). Economic growth and income inequality. American Economic Review. 45(1), 1–28.
  • Lee, V. E. & Smith J. (2001). Restructuring High Schools for Equity and Excellence: What Works. Sociology of Education Series. Teachers College Press, 1234 Amsterdam Avenue, New York, NY 10027.
  • Lin, C. A. (2007). Education expansion, educational inequality, and income inequality: evidence from Taiwan, 1976-2003”, Social Indicators Research, 80(3), 601-615.
  • Lopez, R., Thomas, V., & Wang, Y. (1998). Addressing the Education Puzzle. The Distribution of Education and Economic Reform. World Bank Policy Research Working Paper no.2031.
  • Majeed, M. T. (2016). Economic growth and income inequality nexus: an empirical analysis for Pakistan, Kashmir Econ. Rev. 25(1), 1–12.
  • Marin, A. & Psacharopoulos, G. (1976). Schooling and income distribution. The Review of Economics and Statistics, 58(3), 332-338.
  • Marrero, G. A. & Servén, L. (2022). Growth, inequality and poverty: a robust relationship? Empirical Economics, 63, 725– 791. https://doi.org/10.1007/s00181-021-02152-x
  • Mdingi, K. & Ho, S.-Y., (2021). Literature review on income inequality and economic growth. MethodsX, 8, 101402.
  • Mesa, E.P. (2007). Measuring education inequality in the Philippines. The Philippines Review of Economics, 44(2), 33-70.
  • Milanovic, B. (2016). Global inequality: A new approach for the age of globalization. Harvard University Press.
  • Munir, K. & Arshad, S. (2018). Factor accumulation and economic growth in Pakistan: incorporating human capital, International Journal of Social Economics, 45(3), 480-491.
  • Munir, K. & Bukhari, M. (2020). Impact of globalization on income inequality in Asian emerging economies. International Journal of Sociology and Social Policy, 40(2), 44-57.
  • Munir, K. & Sultan, M. (2017). Macroeconomic determinants of income inequality in India and Pakistan. Theoretical and Applied Economics, 24(4), 109-120.
  • Niyimbanira, F. (2017). Analysis of the impact of economic growth on income inequality and poverty in South Africa: the case of Mpumalanga province, Int. J. Econ. Financ. 7(4), 254–261.
  • O’Neill, D. (1995). Education and income growth: implications for cross-country inequality. Journal of Political Economy, 103(6), 1289-1301.
  • OECD. (2022). Income inequality and poverty. OECD Social and Welfare Statistics. https://www.oecd.org/social/income-distribution-database.htm
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There are 76 citations in total.

Details

Primary Language Turkish
Subjects Macroeconomic Theory, Growth
Journal Section Research Article
Authors

Bayram Aydın 0000-0003-4238-7779

Submission Date March 18, 2025
Acceptance Date October 22, 2025
Publication Date February 28, 2026
DOI https://doi.org/10.25229/beta.1660098
IZ https://izlik.org/JA66UP32DN
Published in Issue Year 2026 Volume: 11 Issue: 1

Cite

APA Aydın, B. (2026). Eğitim Eşitsizliği, Gelir Eşitsizliği ve Ekonomik Büyüme Nedensellik Sarmalı. Bulletin of Economic Theory and Analysis, 11(1), 67-98. https://doi.org/10.25229/beta.1660098

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