Abstract

GUTIERREZ-GARRIDO, Felipe Manuel  and  ACUNA-DUARTE, Andrés Alberto. Local government expenditure on education and its effect on income inequality at the county-level in Chile. ecos.econ. [online]. 2019, vol.23, n.49, pp.4-28. ISSN 1657-4206.  https://doi.org/10.17230/ecos.2019.49.1.

Four measurements of per-capita education expenditure are used to analyze its effect on income inequality at the county-level in Chile. The latter is quantified through the Gini coefficient, Theil index, and the S80/S20 and S90/S10 ratios. The longitudinal study considers 316 Chilean counties in order to estimate a fractional response probit model for the Gini coefficient and random-effects Tobit models for the remaining indicators of inequality. Main findings show that an increasing per-capita education expenditure would reduce the income inequality measured by Theil index, but it would accentuate the gap between the poorest and wealthiest decile/quantile. And a greater education expenditure on personnel and teaching staff would enlarge the Gini coefficient and S90/S10 ratio. In addition, income inequality at the countylevel is exacerbated by a larger indigenous and rural population. Finally, the evidence reveals that a convex Kuznets-curve exists for the extreme values of income distribution.

JEL Classification: D63, I24, O15

Keywords : Income inequality; Education expenditure; Fractional response; Tobit; Latin America..

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