THE RELATIONSHIP BETWEEN INCOME INEQUALITY AND TERTIARY ATTAINMENT FOR DEVELOPING COUNTRIES: IS IT A U-SHAPED RELATIONSHIP?

Year 2016, Volume: 5 Issue: 1, 49 - 57, 30.03.2016

Ozlem Yorulmaz

https://doi.org/10.17261/Pressacademia.2016116553

Abstract

This study explores the effects of tertiary attainment
and per capita income on income inequality for 30 developing countries over the
period 1990-2008 by three different estimation approaches namely classical
estimation of a fixed effects panel data model, quantile panel type regression,
and robust panel type regression models. The findings reveal that there is no
evidence of the Kuznets hypothesis of inverted U curve dependence of income
inequality on income. However, the results of robust panel type regression and
quantile regression for the 20^th percentile indicate this
relationship as U-shaped. According to robust panel type regression, the effect
of tertiary attainment on income inequality is significant and U-shaped, as
well. 

Keywords

Income inequality, Kuznets inverted U hypothesis, Quantile regression, Robust regression, tertiary education

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