Keywords: income inequality, education level, educational inequality, globalisation, income distribution, income level, educational attainment, economic freedom, political freedom
Effects of education and globalisation on income distribution
This study examines the effects of education and globalisation on income inequality using cross–country data. We confirm the existence of the Kuznets inverted–U hypothesis for the relationship between income level and income inequality. However, the inverse U–shaped curve lacks robustness when additional variables are introduced in the model. The empirical results show that educational variables play an important role in determining distribution of income. Our findings indicate that a higher level of educational attainment of the population has contributed to improvement of income distribution, while educational inequity causes income inequality. It is also found that the higher the level of globalisation, the more unequal income distribution, while freedom, whether economic freedom or political freedom, has marginal effects on income inequality.