Inequality in Incomes and Access to Education: A Cross‐country Analysis (1960–95)

Abstract. In the current debate on the relationship between inequality in income distribution and growth, one of the possible links works through access to education. Starting from an optimal demand for education where, among other things, the years of education depend on family income, we derive two testable predictions in the analysis of aggregate data on school enrolments: a negative (linear) dependence of enrolment rates on the Gini concentration index on income distribution; and a positive dependence on public resources invested in education and/or on skill premium in the labour market. These predictions are tested on a (unbalanced) panel of 108 countries for the period 1960–95. The main finding of this analysis is that, once we control for the degree of development with the (log of) per capita output, financial constraints seem mainly relevant in limiting the access to secondary education. However, when considering gender differences, there is evidence that female participation in education is more conditioned by family wealth, in some cases starting from primary education. Finally, there is weak evidence that public resources spent on education raise the enrolment rates.