De Economist

, Volume 137, Issue 4, pp 454–465 | Cite as

Rates of return to education and income distribution

  • Jandhyala B. G. Tilak


This paper examines the relationship between rate of return to education and income distribution with the help of cross-nation data on 30 developing and developed countries. The results indicate that the higher income groups in the society benefit the higher the rate of return to any level of education, and the bottom 40 percent and the middle 40 percent income groups lose; and the disadvantage for the poor income groups is the least at the primary level of education. As higher rates of return to education suggest higher levels of income inequalities, rapid expansion of the education system may reduce income inequalities through decline in rates of return to education. Secondly, it is also argued here that since high income groups benefit from all levels of education, education investments targeted specifically towards the poor may be preferred to overall investment in education.


Develop Country High Income Education System International Economic Public Finance 
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Copyright information

© H.E. Stenfert Kroese B. V. 1989

Authors and Affiliations

  • Jandhyala B. G. Tilak
    • 1
  1. 1.The World BankWashingtonUSA

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