This paper provides new measures of human capital inequality for a broad panel of countries. Taking attainment levels from Barro and Lee (2001), we compute Gini coef®cients and the distribution of education by quintiles for 108 countries over ®ve-year intervals from 1960 to 2000. Using this new cross-country data on human capital inequality two main conclusions are obtained. First, most countries in the world have tended to reduce the inequality in human capital distribution. Second, human capital inequality measures provide more robust results than income inequality measures in the estimation of standard growth and investment equations.

We construct a revised version of the Barro and Lee (1996) data set for a sample of OECD countries using previously unexploited sources and following a heuristic approach to obtain plausible time profiles for attainment levels by removing sharp breaks in the data that seem to reflect changes in classification criteria. It is then shown that these revised data perform much better than the Barro and Lee (1996) or Nehru et al (1995) series in a number of growth specifications. We interpret these results as an indication that poor data quality may be behind counterintuitive findings in the recent literature on the (lack of) relationship between educational investment and growth. Using our preferred empirical specificaction, we also show that the contribution of TFP to cross-country productivity differentials is substantial and that its importance relative to differences in factor stocks increases over time. ______________________* We gratefully acknowledge financial support from the European Fund for Regional Development, the Spanish Ministry of Education through CICYT grants SEC99-1189 and SEC99-0820 and the European TNR "Specialization vs. diversification: the microeconomics of regional development and the propagation of macroeconomic shocks in Europe." We thank José Emilio Boscá, Anna Borkowsky (Swiss Federal Statistical Office) and Gunilla Dahlen (Statistics Sweden) for their helpful comments and suggestions, and María Jesús Freire and Juan Antonio Duro for their helpful research assistance.

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This article presents a model in which inequality affects per capita income when individuals decide to invest in education taking into account their life expectancy, which depends to a large extent on the human capital of their parents. Our results show the existence of multiple steady states depending on the initial distribution of education. The low steady state is a poverty trap in which children raised in poor families have low life expectancy and work as non-educated workers. The empirical evidence suggests that the life expectancy mechanism explains a major part of the relationship between inequality and human capital accumulation. Copyright � 2008 The Author(s).

We construct a revised version of the Barro and Lee (1996) data set for a sample of OECD countries using previously unexploited sources and following a heuristic approach to obtain plausible time profiles for attainment levels by removing sharp breaks in the data that seem to reflect changes in classification criteria. It is then shown that these revised data perform much better than the Barro and Lee (1996) or Nehru et al (1995) series in a number of growth specifications. We interpret these results as an indication that poor data quality may be behind counterintuitive findings in the recent literature on the (lack of) relationship between educational investment and growth. Using our preferred empirical specificaction, we also show that the contribution of TFP to cross-country productivity differentials is substantial and that its importance relative to differences in factor stocks increases over time. ______________________* We gratefully acknowledge financial support from the European Fund for Regional Development, the Spanish Ministry of Education through CICYT grants SEC99-1189 and SEC99-0820 and the European TNR "Specialization vs. diversification: the microeconomics of regional development and the propagation of macroeconomic shocks in Europe." We thank José Emilio Boscá, Anna Borkowsky (Swiss Federal Statistical Office) and Gunilla Dahlen (Statistics Sweden) for their helpful comments and suggestions, and María Jesús Freire and Juan Antonio Duro for their helpful research assistance.