The objective of this research is to contribute in the effort to explain the seemingly paradoxical relation between education and income distribution during the period 1984-2000. For that purpose we use a decomposition of households' income functions, that isolates the effect of each of the variables included in this kind of functions, focusing on the human capital variables. Generally, it is checked that the family head's schooling plays each time a more important role in determining the level of income inequality. Subsequently, an analysis of dynamic nature is carried out to assess how the changes on certain variables (schooling, work experience, family head's gender, family size, etc.) affect income distribution. The basic conclusion is that despite of the importance of schooling levels to explain income inequality, the evolution of the human capital yields clearly determines the evolution of income inequality: when yields in high schooling levels are increased, income inequality tends to get worse and vice versa.
|Publication status||Published - 1 Apr 2006|