Education Enrollment Level and Income Inequality: A Case of SAARC Economies

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Date: Dec. 2018
From: Social Indicators Research(Vol. 140, Issue 3)
Publisher: Springer
Document Type: Report
Length: 227 words

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Byline: Noman Arshed (1), Awais Anwar (2), Nabeela Kousar (3), Samra Bukhari (1) Keywords: Education; Income inequality; DMR; Panel co-integration; Panel FMOLS; I24; O15; O53 Abstract: This study is based on the idea that education forms a quadratic relationship with the income inequality. To evaluate it for South Asian Association for Regional Cooperation (SAARC) countries, this study uses the panel data from 1990 to 2015. Long run panel data necessitated the use of panel co-integration approach, followed up with fully modified OLS model to generate long-run coefficients. The results depict that initially primary and secondary enrollment increases inequality while tertiary enrollment decreases it. However, after a certain threshold level of enrollment (76% for primary, 42% for secondary and 7% for tertiary), their effect reverses. Thus, it makes inverted U shape for primary and secondary enrollment and U shape for tertiary enrollment. Hence education shows diminishing marginal return effect. Only the countries of India, Sri Lanka, Maldives and Nepal in SAARC economies have high enough education enrollments to cause a negative effect on income inequality. Author Affiliation: (1) grid.444940.9, Department of Economics, University of Management and Technology, Lahore, Pakistan (2) 0000 0004 1761 1174, grid.27255.37, Center of Economic Research, Shandong University, Jinan, China (3) 0000 0004 0637 891X, grid.411786.d, Department of Economics, Government College University, Faisalabad, Pakistan Article History: Registration Date: 08/12/2017 Accepted Date: 07/12/2017 Online Date: 13/12/2017

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Gale Document Number: GALE|A561796187