Education on Inequality

Abstract

As inequality continues to grow, scholars remain conflicted on solutions to diminish the gaps in earnings. Mexico is an upper-middle income country, however it is also among the high inequality countries. This study uses data from the Mexican Intercensal Survey to analyze the relationship of the dispersion of education on the amount of earnings inequality. Regions with higher educational inequality and educational attainment tend to have higher earnings inequality. The research was expanded to explore how inequality has changed over the course of the 21st century. The results concluded that the mean educational attainment and average earnings increased as the GINI and EGINI coefficients notably decreased over the fifteen year timespan. From a policy perspective, this finding sets the tone for a bottom-up approach. While not hindering the attainment of the top, ideal policy would incentivize opportunity for bottom achievers. Furthermore, the results clearly contradicted Kuznets’ hypothesis with a U-shaped distribution between earnings and inequality. This paper explores alternative development theories as well as policy action focusing on education to reduce inequality.