The Relationship Between College Expansion and Income Inequality

Authors

Aidan J. Wang, University of California, BerkeleyFollow

Abstract

This paper examines the relationship between college expansion and income inequality within a country. Researchers have identified a “composition effect,” “compression effect,” and “dispersion effect.” However, the shape and magnitude of the net relationship remains unclear. I construct a country panel using inequality data from the World Inequality Database and college share data from Barro and Lee. From 0% to 27% college share, the bottom 50% and middle 40% income shares decrease linearly while the top 10% income share increases linearly. The trend shape holds for a sample of only OECD countries, but the magnitude changes, suggesting country-specific factors matter.

Recommended Citation

Wang, Aidan J. (2019) "The Relationship Between College Expansion and Income Inequality," Undergraduate Economic Review: Vol. 16: Iss. 1, Article 4.
Available at: https://digitalcommons.iwu.edu/uer/vol16/iss1/4