Income inequality has steadily increased in the United States since the census bureau began officially accounting for it in 1967. Over thirty-percent of American income has been concentrated with the top 5% of income earners since 1976. This study examines the notion that education expenditures have an equalizing effect on income inequality. Based on a panel dataset of fifty states over twenty years from 1986-2005, this research examines the effect of total current education expenditures and sector specific expenditures on the Gini-coefficient. A fixed effects regression model, applied with lagged expenditure data, shows that education only reduces income inequality in the long-run.
Bachelor of Arts
Includes bibliographical references.