Educational Mismatch and Income Inequality in Developing Countries

Abstract

This study aims to evaluate the influence of educational mismatch on income inequality in developing countries. The research is conducted using secondary data from ten developing countries over a twenty-year period (2001–2020). Statistical analysis is performed on the dataset using Stata, where the main variable representing income inequality is the GINI coefficient, and educational mismatch is assessed using educational attainment, educational attainment of females, and educational expenditure. The fixed effect and robust standard error techniques are applied to address the association among the variables. The study's findings reveal that educational attainment and educational expenditure have a positive influence on the GINI coefficient, indicating that the two factors contribute to an educational mismatch in the developing country. On the other hand, the findings also reveal that the educational attainment of females has a negative effect on the GINI coefficient, indicating that a high level of educational attainment among females can help to improve the income equality of developing countries. The implications of the study are particularly relevant to the policymakers and governments of developing countries. They should take steps to increase the level of education among females to contribute to increased income equality levels in their country.