Research Teams

DIE 06/22 - Determinantes de la desigualdad: educación y grupos de altos ingresos en Uruguay.

ISSNISSN/ISBN: 2301-1963
AutorAuthor/s: Ardoguein, Carolina, Pessina, Julieta

This paper studies education as a determinant of income for top income groups in Uruguay. Given that these groups play a significant role in explaining inequality and that education is one of the main drivers of it, this paper seeks to study the extent to which educational-level income differentials explain the income gap between the top 1 percent of the distribution and the rest of the society. The effect of education is estimated through Mincer Equations for the mean, as well as through Recentered Influence Regressions for different percentiles along the distribution. Our results show that education is a key determinant in explaining income and that educational returns are heterogeneous across the distribution. Moreover, it is evident that the higher the level of education, the greater the difference in returns for different income percentiles. Additionally, we find that the association between education and income is stronger when both labor and capital income are considered than when only labor income is taken into account, particularly for tertiary education level or higher. A more exhaustive analysis of the top 1% group shows that the 62% of the group have completed tertiary education or higher, and they capture most of the capital income of this group.

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