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Private education and inequality in the knowledge economy
[journal article]
Abstract This article explores the consequences of public and private spending on education at all levels, looking at skills and income inequality. We use data for 22 affluent democracies from 1960 or 1995 (depending on data availability) to 2017. High levels of public education spending consistently lower i... view more
This article explores the consequences of public and private spending on education at all levels, looking at skills and income inequality. We use data for 22 affluent democracies from 1960 or 1995 (depending on data availability) to 2017. High levels of public education spending consistently lower income inequality, both measured as wage dispersion and as the education premium. In contrast, higher levels of private education spending are associated with both higher wage dispersion and a higher education premium. We show that this effect works in part through differential skills acquisition. Public education spending raises the math scores of 15-years old students at the mean and at the 25th percentile, but private education spending has no effect on skills at these levels. We find the same pattern among skills of adults; public education spending raises skills at the 25th percentile and the mean; private spending has no effect. Finally, we also show that higher levels of adult skills indeed depress the education premium.... view less
Keywords
competence; education; qualification; knowledge economy; difference in income; cognitive ability; inequality
Classification
Macroanalysis of the Education System, Economics of Education, Educational Policy
Free Keywords
PIAAC; wage dispersion; skill premium; private education
Document language
English
Publication Year
2020
Page/Pages
p. 171-188
Journal
Policy and Society, 39 (2020) 2
Issue topic
Social Investment in the Knowledge-Based Economy: New policies and politics
DOI
https://doi.org/10.1080/14494035.2019.1636603
ISSN
1839-3373
Status
Published Version; peer reviewed