Educational Inequality

Abstract

This paper develops a theoretical model of the inequality in wages and salaries associated with differences in years of schooling (educational inequality, for short). Our model assumes that in the long run individual decisions to become more educated equalize the lifetime earnings of more educated workers and comparable less educated workers. Given this assumption, our model implies that innovations that increase the relative demand for more educated labor, and which cause short-run increases in educational inequality, in the long run induce offsetting increases in the relative supply of more educated labor. But our model also has the novel implication that innovations that increase differences between the wages and salaries received by workers with the same years of education who are more or less able (ability premiums, for short) cause a smaller fraction of workers to choose to become more educated. Consequently, innovations that increase ability premiums in the long run also cause educational inequality to be larger than otherwise. In applying our theory to recent changes in educational inequality in the USA, we suggest that, to the extent that innovations that increase ability premiums are contributing to educational inequality, the increases in educational inequality during the 1980s and 1990s are unlikely to be reversed soon.

Socio-economic pathways to diet: modelling the association between socio-economic position and food purchasing behaviour

“…We adopted this approach in our present study; however our results suggest that simultaneous adjustment for multiple socio-economic indicators can introduce its own inherent problems. One of the findings to have emerged from studies that adopt a life-course approach to investigate health inequalities is that education, occupation and income follow a temporal ordering and are often determinative 45 , with a person's level of education likely to influence their occupational status, which in turn influences their earning potential 46,47 . These findings should directly inform how we specify our analytical models, otherwise we run the risk of 'over-adjusting' our models.…”

Chapter 5 Educational Wage Premia and the Distribution of Earnings: An International Perspective

“…For example, Heckman, Lochner and Taber (1998) develop a heterogenous-agent dynamic general equilibrium model of labor earnings, estimate it using micro data, and use the estimated model to explore the empirical plausibility of alternative explanations for the rise in wage inequality. Azuma and Grossman (2003) develop a model where innovations that increase the relative demand for more educated labor are concomitant with innovations that increase ability premia. The former cause short-run increases in educational premia but long-run offsetting increases in the relative supply of more educated workers.…”

Discrimination in Education Financing

“…The labor market is a fierce contender in the tension between African Americans and educational inequality as Azuma and Grossman (2001) indicate in their study. They refer to the ability of two people having the same amount of education yet one is far better equipped mentally and socially to do a job as "ability premiums."…”