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Educational Attainment and Income Inequality in Southeast Missouri

Educational Attainment and Income Inequality in Southeast Missouri. Kang H. Park Professor of Economics Southeast Missouri State University. Introduction. Human capital theory: Educational spending is an investment because it increases worker productivity.

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Educational Attainment and Income Inequality in Southeast Missouri

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  1. Educational Attainment and Income Inequality in Southeast Missouri Kang H. Park Professor of EconomicsSoutheast Missouri State University

  2. Introduction • Human capital theory: • Educational spending is an investment because it increases worker productivity. • Human capital theory is used to explain income differentials. • This study examines the effects of educational variables on income and income inequality in Southeast Missouri, using the 2000 US census data covering 34 Southeast Missouri counties. • Gini index from B. Domazlicky’s 2005 article.

  3. Descriptive Statistics EDMEAN: Average years of schooling EDSD: Standard deviation of years of schoolingEDCV: Coefficient of variation of years of schooling, EDSD/EDMEANGini Index (GINI): measure of income inequality

  4. Regression of income on education variables N=34 Numbers in parentheses are t-values. ** The variable is significant at the 0.01 level and * The variable is significant at the 0.05 level.

  5. Regression of income inequality on income and education variables N=34 LnCapita: natural logarithm of per capita incomeNumbers in parentheses are t-values. ** The variable is significant at the 0.01 level and * The variable is significant at the 0.05 level.

  6. Summary • A higher levels of income and education have an equalizing effect on income distribution • The dispersion of schooling has a disequalizing effect on income distribution. • Both LnCapita and EDSD (or EDCV) are statistically significant in explaining the poverty rate. • only EDSD(or EDCV) can explain the Gini index well.

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