Economic Thought and Practice, , 2026.
Original scientific paper
https://doi.org/10.17818/EMIP/2026/40
DOES EDUCATIONAL INEQUALITY WEAKEN THE AGGREGATE INCOME PAYOFF TO SCHOOLING? EVIDENCE FROM OECD COUNTRIES
Kemal Erkişi
; Antalya Bilim University, Department of Economics, Antalya, Türkiye
*
* Corresponding author.
Abstract
This study examines whether educational inequality moderates the relationship between schooling and income per capita in OECD countries from 1995 to 2024. Average years of schooling are combined with an attainment-based education Gini index to capture both the level and distribution of human capital. Given cross-sectional dependence and slope heterogeneity, the Common Correlated Effects Mean Group estimator is used as the main method, with the Augmented Mean Group estimator and System GMM employed as robustness checks. The results show a positive association between average schooling and income per capita. The interaction between schooling and educational inequality is negative and statistically significant. Marginal effects indicate that the income gain associated with an additional year of schooling decreases as educational inequality rises. The findings suggest that the economic returns to educational expansion depend on both average attainment and its distribution, supporting policies that expand schooling while reducing disparities in educational attainment.
Keywords
educational inequality; education Gini; average schooling; aggregate income payoff; human capital distribution; OECD countries
Hrčak ID:
351162
URI
Publication date:
22.9.2026.
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