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Education and Wage Inequality in Europe - EDWIN, Final Report, EUR 23127

Project ID: HPSE-CT-2002-00108


The EU and most national governments consider educational expansion as an important policy tool for reversing or slowing the rise in inequality observed in a growing number of European countries. At the same time, emerging evidence reveals that aggregate wage inequality is due not only to differences in educational attainment but also to disparities within educational groups. This 30-month project on Education and Wage Inequality in Europe - EDWIN (HPSE-CT-2002-00108) has addressed the key question of the interplay between educational expansion and wage inequality in Europe. It has aimed to understand and explain the observed patterns and trends and to study the practical implications for economic and social policy.
To further this aim, in-depth empirical analysis has been carried out on the relationship between education and wage inequality in Europe over the past few decades, up to the new millennium, with a focus on wage inequality not only between groups but also within groups (stratified according to education, gender, age, and sector). This research has contributed with new European-wide knowledge in the form of: (1) a broad-based literature review drawing together the 'pre-EDWIN' international as well as national evidence on the interplay between education and wage inequality; (2) new cross-European comparative evidence on the level, structure and inter-temporal changes of earnings inequality; (3) new cross-European comparative evidence on the economic effects of demographic and educational shocks both in terms of earnings and (un)employment; and (4) new comparative cross-European evidence on the private economic benefits from investing in education with particular emphasis on the extent and evolution over time of within-educational-group differences in returns and, hence, on the wage risk associated with investments in education, and, in the last resort, on the observed patterns of wage inequality.

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