Investments in education are widely perceived as the tonic for inequality. Equip a nation’s poor with education and many will catch up to the elites; deny them education and they will fall further behind. At first glance, the logic seems impeccable, and for at least two decades now, this assumption has served as the explicit theoretical rationale for education-related policy interventions in the developing world. But does higher primary enrollment really lead inexorably to greater economic equality? What do the data say?
Surprisingly – and worryingly – our empirical investigation of recent trends across the developing world finds that higher primary enrollment rates are associated with higher, not lower, inequality ten years later.
Of course this surprising finding could be the result of other factors. But when we control for other variables commonly linked to inequality, the relationship persists.
It’s not all bad news, though. For it turns out that the relationship depends on how countries spend their education budgets. In most developing countries, education spending is heavily weighted towards university students – a systematic bias we call the ‘tertiary tilt’. The bottom line? When money is pumped into education, elite students with the best earning potential are typically the biggest beneficiaries.
If getting more kids into school always led to lower inequality, the policy implications would be simple. In reality, though, the quality of primary education matters as much as the quantity. That is why increasing the number of kids in school brings down inequality only in countries where governments avoid ‘tilting’ their education spending toward university students and instead prioritise primary schooling. In these countries, enabling more students to go to school equalises incomes even after taking other variables into account and, as our research demonstrates, it does so by a lot.