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Income and educational inequalities and regional economic growth in the European Union: The role of urbanisation, geography and institutions.

Tselios, Vasileios (2007) Income and educational inequalities and regional economic growth in the European Union: The role of urbanisation, geography and institutions. PhD thesis, London School of Economics and Political Science (United Kingdom).

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Abstract

This thesis provides an empirical study of how changes in the distributions of income and education affect the evolution of regional economic growth in the EU. It uses microeconomic data from the European Community Household Panel, as well as macroeconomic data from the Eurostat's Regio databases for 102 regions over the period 1995-2002. Income distribution is measured in terms of income per capita and income inequality, not only for the population as a whole but also for those people normally in work; and educational distribution is measured in terms of educational attainment and inequality. Two proxies for educational distribution are considered: the distribution of the education level completed and the distribution of the age at which the highest education level was attained. These data are analysed using exploratory spatial data analysis methods and econometric analyses of static and dynamic panel data models. The results of the analysis reveal the complexity of the interaction between income and educational inequalities and economic performance in the EU. First, they highlight the positive relationship between income and educational inequality. This relationship is robust to changes in the specification of the model (static or dynamic), in the definition of income and educational distributions and to the inclusion of different control variables, such as population ageing, work access, unemployment and inactivity. This link is related to the higher than expected responsiveness of the EU labour market to differences in qualifications and skills, and to the presence of a level of income inequalities that does not discourage involvement in education. Urbanisation and geography (i.e. latitude), as well as institutional factors, also seem to matter for inequalities. Both income and educational inequalities are lower in social-democratic regimes, in Protestant areas and in regions with Nordic family structures. Second, the empirical analysis reveals that the increase in a region's inequality in the level of income and the education level completed has a significantly positive - but not causal - relationship with subsequent regional economic growth. The regression results also identify the presence of convergence across European regions, although this is sensitive to the inclusion of control variables. However, when the distribution of age at which the higher education level was completed was considered rather than the level of education attained, the results indicate a negative, but non-robust, association between educational inequality and economic growth. Finally, urbanisation appears to affect regional economic growth, while latitude and institutions, in contrast to what was the case with inequalities, do not matter for growth.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Economics, General
Sets: Collections > ProQuest Etheses
URI: http://etheses.lse.ac.uk/id/eprint/1964

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