Inequality in Education and Economic Growth: Empirical Investigation and Foundations - Evidence from MENA Region

Abstract

This paper investigates empirically the extent of educational inequality and its impact on economic growth. Based on Barro and Lee’s (2010) data, we calculate two indicators measuring inequality of education. The sample comprises 15 countries from the MENA region over the period 1970-2010. As a second step, we applied the Kuznets curve of education for each country of the sample. As a third step, we examine the impact of education inequality on the economic growth in MENA region by using OSL and Instrumental Variables panel regressions with country fixed-effects. The findings show a decline in the Gini index within all the countries, for men and women and also for all age groups. The results also indicate that the education distribution was more unequal in the middle-income countries than in the higher-income countries in 2010. The results suggested that the shape of the Kuznets curve depends basically on the measure used to approximate the inequality. The results demonstrate also that the Gini index of men negatively and significantly affects the growth of higher-income countries. At the same time, the total Gini index influenced negatively and significantly the economic growth of all the countries, including those of high income. These results are therefore robust for the used econometric techniques. In terms of economic policy, the results suggest policymakers to focus on educational policies apt to reduce educational inequalities, especially for women, to improve the well being of the population