Education and wage inequality in Europe

Abstract

In this paper we apply a quantile regression (QR) approach to the EU-SILC data set, in order to explore the connection between education and wage inequality in eight European countries. Our results corroborate the positive relation between wage increase and education and it holds true across the whole distribution. This effect is generally stronger at the highest quantiles of the distribution than at the lowest, implying that schooling increases wage dispersion. This evidence is found to be rather robust like the applied tests of linear hypothesis show.