Education And Wages

Education And Wages

Does Education Reduce Wage Inequality
Quantile Regression Evidence From Sixteen Countries*
(7 October 2002)
Pedro Silva Martins1
University of Warwick
Pedro Telhado Pereira 2
Universidade da Madeira, CEPR and
IZA
Abstract: Quantile regression estimates of returns to education are used to address the relation
between schooling and wage inequality. Empirical evidence for male workers from sixteen
countries for the mid-1990?s suggests a robust stylised fact: Returns to schooling are higher for
the more skilled individuals, conditional on their observable characteristics. This suggests that
schooling has a positive impact upon within-levels wage inequality. Factors such as
overeducation, ability-schooling interactions and school quality or different fields of study may
be driving this result.
Keywords: Returns to Education, Wage Inequality, Quantile Regression
JEL codes: C29, J31, I21
* This paper was written under the scope of the 15-country ?PuRE – Public Funding and Private Returns to
Education? European Commission TSER project. The results presented here are based on work done by country
teams headed by Mahmood Arai, Rita Asplund, Erling Barth, Giorgio Brunello, Colm Harmon, Joop Odink, Pedro
Pereira, Jose Luis Raymond, Ali Skalli, Viktor Steiner, Panagiotis Tsakloglou, Ian Walker, Niels Westergaard-
Nielsen, Rudolf Winter-Ebmer and Stefan Wolter. We also thank participants at several seminars and a referee and
the associate editor for comments and suggestions. The usual disclaimer applies.
1 Corresponding author. Email: [email protected] Phone:

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