1. Private education and inequality in the knowledge economy
- Author
-
John D. Stephens, Jacob R. Gunderson, and Evelyne Huber
- Subjects
Labour economics ,inequality ,Public Administration ,Sociology and Political Science ,Inequality ,media_common.quotation_subject ,private education ,Ungleichheit ,education ,competence ,wage dispersion ,Wissensökonomie ,cognitive skills ,Economic inequality ,ddc:370 ,cognitive ability ,0502 economics and business ,Erziehung ,050602 political science & public administration ,Economics ,difference in income ,Cognitive skill ,qualification ,Bildung und Erziehung ,health care economics and organizations ,media_common ,knowledge economy ,Knowledge economy ,05 social sciences ,Wage dispersion ,PIAAC ,skill premium ,Macroanalysis of the Education System, Economics of Education, Educational Policy ,0506 political science ,lcsh:Political institutions and public administration (General) ,Makroebene des Bildungswesens ,Political Science and International Relations ,lcsh:JF20-2112 ,Private education ,Einkommensunterschied ,Bildung ,Qualifikation ,050203 business & management ,kognitive Fähigkeit ,Kompetenz - Abstract
This article explores the consequences of public and private spending on education at all levels, looking at skills and income inequality. We use data for 22 affluent democracies from 1960 or 1995 (depending on data availability) to 2017. High levels of public education spending consistently lower income inequality, both measured as wage dispersion and as the education premium. In contrast, higher levels of private education spending are associated with both higher wage dispersion and a higher education premium. We show that this effect works in part through differential skills acquisition. Public education spending raises the math scores of 15-years old students at the mean and at the 25th percentile, but private education spending has no effect on skills at these levels. We find the same pattern among skills of adults; public education spending raises skills at the 25th percentile and the mean; private spending has no effect. Finally, we also show that higher levels of adult skills indeed depress the education premium.
- Published
- 2020