The impact of education on household income and expenditure inequality

Abstract

This article uncovers the distribution of returns to education at the household level using quantile regression techniques applied to a representative household survey in Portugal. We conclude that education has a positive impact on within-level income inequality, but no significant impact on expenditure inequality.

Keywords:

• returns to education
• quantile regression
• income inequality
• expenditure inequality

JEL Classification:

• C21
• D31
• I20

Acknowledgements

The author is extremely grateful to António Antunes, Mário Centeno and Álvaro Novo for their insightful discussions. The views expressed in this article are of the author and do not necessarily coincide with those of Banco de Portugal. All remaining errors are the sole responsibility of the author.

Notes

¹ In the survey, the household head is typically the male spouse (in 85% of couples) and displays an education level equal to or higher than the spouse in about 80% of cases.

² According to the survey, working-age household heads and spouses with a college degree have on average participation rates 10–15 percentage points higher than household heads and spouses without a college degree.

³ These results are available from the author upon request.