• Földvári, Peter
• Li, Jieli
• Van Leeuwen, Bas

Abstract

In this paper, we address the issue of how education affected income inequality in twentiethcentury Africa. Three channels are identified through which education may affect income inequality. First, an increase in the average educational level is correlated with an increase in average income, which, <br/>ceterisparibus,reducesinequality.Second,areductionineducationalinequalitymay,givena positivecorrelationbetweeneducationlevelandin come,reduceincomeinequality.Thirdly,an increase in the supply of education may decrease th e price of skilled labour thus lowering income <br/>inequality. <br/>Wefindthatinthelongruneducationdoesnotaffectincomegrowth,indicatingthatin twentiethcenturyAfricaitwasinspiration(i.e., <br/>TotalFactorProductivity[TFP])ratherthan perspiration (i.e., education and physical capital)that drove economic development. Testing for the effectsoftheremainingtwochannels,wefounda significantnonlinearrelationshipbetween educationalandincomeinequalitysuggestingthat, <br/>contrarytothelevelofeducation,thesetwo channels were important in determining income inequality in Africa. Taking an example from the end of the twentieth century, if educational equality had been eliminated, then income inequality would decline by no less than 81%.

Topics

• impedance spectroscopy
• laser emission spectroscopy