Education and Inequality in India: A Microeconometric Decomposition Analysis

What effect has educational expansion had on income inequality in India? This study uses household survey data to measure how education affected the distribution of household consumption expenditures in the periods 1987-1993 and 1993-2004. The first results indicate that changes in educational attainment increased inequality in the first period, but decreased inequality in the latter. The returns to education had the opposite effect, namely to reduce inequality in the first period but raise it in the latter. The total direct effect of education was therefore very small in both periods. Changes in fertility, however, contributed to a substantial rise in inequality in both periods.