Monday, April 27, 2009

College and income inequality

by Andrew Gillen

In The Race between Education and Technology, Claudia Goldin and Lawrence Katz argue that the rise in inequality in recent years can largely be attributed to the slowdown in educational attainment.

But Lane Kenworthy is not quite convinced. He says that “comparative evidence doesn’t seem especially supportive of the Goldin-Katz hypothesis,” showing a graph of changes in schooling and inequality by country, and there is not a clear link absent the US.

He also notes that “the key features of the rise in U.S. income inequality are soaring incomes among the top 1% of households (especially the top 0.1%) and slow income growth in the bottom half of the distribution. A slowdown in the supply of college graduates is unlikely to be the key to either of these two developments.”