The changing education distribution and income inequality in Great Britain
10 Oct 2020
Over the past years, education attainment has increased at an unprecedented rate in Great Britain. We analyze how the education expansion affected inequality in household net incomes since the early 2000s. We show that, all else being equal, education composition changes led to higher living standards mostly through higher wages. As education expansion led to larger income gains in the middle and top than at the bottom of the distribution, income inequality increased. Despite the increasing share of high‐educated workers, we find limited evidence of a “compression” effect on inequality, as the higher education wage premium remained broadly unchanged.
Review of Income and Wealth
Open Access; © 2020 The Authors. Review of Income and Wealth published by John Wiley & Sons Ltd on behalf of International Association for Research in Income and Wealth; This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.; Online Early