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Technology, education and income inequality
(2021-09-30) Manos, Athanasios; Μάνος, Αθανάσιος; Athens University of Economics and Business, Department of International and European Economic Studies; Kalyvitis, Sarantis; Roumanias, Konstantinos; Kammas, Pantelis
The effect of technological progress on income inequality has been studied and analyzed by a vast array of theoretical and empirical literature. Recognizing the significant role of education in that context, we attempt an approach to the aforementioned relationship through the theoretical framework of a “Race Between Education and Technology” (RBET) for a set of 77 countries, using the Harmonized Learning Outcomes index of Angrist et al. (2021) as a proxy for education and the R&D expenditure and the number of patent applications as proxies for technology. Although we find evidence for the negative relationship between education and income inequality that the RBET suggests, we also find that technology and income inequality are negatively correlated, which contradicts the above theory but is in line with other empirical findings.