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