The effects of the quality and quantity of education on income inequality

High levels of income inequality characterize both developed and developing countries. This paper focuses on how the quality of education, measured by international, standardized test scores, and the quantity of education, measured by the average years of school attainment, affect the distribution of income. Overall, both greater educational achievement and educational attainment reduce income inequality. The marginal effect, however, is stronger for increases the educational attainment when considering their interactive effects. This result is robust, and strengthened, when the focus is on only developing countries, and to the inclusion of additional factors attributed to the growth of inequality such as globalization, technological progress, the quality of institutions and educational spending. Considering only the quantity of education misses other important elements of education that contribute to explaining the dynamics of income inequality.