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Educational Attainment and Income Inequality in Southeast Missouri Kang H. Park Professor of Economics Southeast Missouri State University.

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Presentation on theme: "Educational Attainment and Income Inequality in Southeast Missouri Kang H. Park Professor of Economics Southeast Missouri State University."— Presentation transcript:

1 Educational Attainment and Income Inequality in Southeast Missouri Kang H. Park Professor of Economics Southeast Missouri State University

2 Introduction  Human capital theory: –Educational spending is an investment because it increases worker productivity. –Human capital theory is used to explain income differentials.  This study examines the effects of educational variables on income and income inequality in Southeast Missouri, using the 2000 US census data covering 34 Southeast Missouri counties.  Gini index from B. Domazlicky’s 2005 article.

3 VariableMinimumMaximumMean Standard deviation EDMEAN 10.98 (Pemiscot) 12.94 (Pulaski) 11.790.388 EDSD 2.52 (Miller) 3.61 (Pemiscot) 2.900.260 EDCV 0.206 (Camden) 0.328 (Pemiscot) 0.2470.029 Household Income (HINCOME) $28,978 (Shannon) $47,221 (Camden) $36,170$4,578 Family Income (FINCOME) $11,492 (Shannon) $55,283 (Cape Girardeau) $41,401$5,329 Per Capita Income (CAPITA) $11,492 (Shannon) $20,197 (Camden) $14,520$1,768 Poverty Rate (POVERTY) 8.2 (Ste. Genevieve) 30.4 (Pemiscot) 18.25.21 Gini Index (GINI) 0.336 (Pulaski) 0.481 (Pemiscot) 0.4040.033 Descriptive Statistics EDMEAN: Average years of schooling EDSD: Standard deviation of years of schooling EDCV: Coefficient of variation of years of schooling, EDSD/EDMEAN Gini Index (GINI): measure of income inequality

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5 Southeast Missouri Data CountyedmeanedsdedcvpopHincomeFincomecapitapovertyGini Butler12.0472.9717140.2466774086738000451571572118.60.4477 Bollinger11.4712.8588340.2492231202935413403711364113.80.3586 Camden12.79552.6314080.2056513705147221530002019711.40.4152 Cape_Girardeau12.9123.0425820.235646869346272552831859311.10.3834 Carter11.62353.1040860.267053594133143360641334925.20.4207 Crawford11.772.6701080.2268572280437726433561482516.30.3883 Dent11.58052.9412260.2539811492735513403331446317.20.3935 Douglas11.7822.8407130.2411061308434605378641378517.50.3956 Dunklin11.27353.3150.2940623315533066381391335124.50.4262 Howell12.042.6840330.2229263723834427394181395918.70.4127 Iron11.50353.065860.26649210697354154163714227190.4303 Laclede12.0472.5724380.2135333251339479431911557214.30.3962 Madison11.5852.8386240.2450261180032092369491321517.20.3992 Maries11.9292.7381150.229534890338570440311566213.10.3496 Miller12.072.5246020.2091552356437978435351514414.20.3673 Mississippi11.19553.3642150.3004971342732139379761303823.70.445 New_Madrid11.23.4191560.3040871976035027404671420422.10.4292 Oregon11.71952.7904440.23810310344306353525712812220.4256 Ozark11.82.6410910.2225679.54233776382891413321.60.4281 Pemiscot10.98353.6070010.3284022004732372378611296830.40.4809 Perry11.7352.7731940.2363181813242693500721655490.3455 Phelps12.8033.1309310.2445473982538894465191608416.40.3942 Pulaski12.9372.6921440.2080964116540442435271458610.30.336 Reynolds11.50252.7608790.240024668931450360641306520.10.3812 Ripley11.3443.0978610.27308413509314643542012889220.417 StFrancois12.0362.7302660.2268425564138872442701527314.90.3816 SteGenevieve11.8412.62890.2201178424628951897172838.20.3524 Scott11.8632.8580320.240924042239705455701562016.10.3951 Shannon11.54652.6598150.230357832428978336381149226.90.4416 Stoddard11.57953.0369080.2622662970535859414621465616.50.4062 Texas11.8982.7465140.2308382300333219377971379921.40.427 Whashington11.35653.0066160.2647482334434980399801293420.80.4225 Wayne11.16653.1366370.2808971325931928367661343421.90.429 Wright11.7982.847020.2413141795532144364611313521.70.4064

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7 Dependent Variable: Income Per Capita IncomeHousehold IncomeFamily Income Intercept-18816 (-2.334)*-42875 (-2.015)*-58864(-2.311)* EDMEAN2690 (5.084)**6597 (4.723)**7881(4.714)** EDSD561 (0.565)442 (0.169)2540 (0.809) Adjusted R 2 0.4660.4450.413 F-value15.4014.2212.62 Regression of income on education variables N=34 Numbers in parentheses are t-values. ** The variable is significant at the 0.01 level and * The variable is significant at the 0.05 level.

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10 Dependent Variable Poverty Rate Gini Index Intercept289.81(6.206)**260.21 (5.518)**1.02 (2.305)*0.82 (1.841) LnCapita-30.88 (-5.277)**-27.10 (-5.784)**-0.08 (-1.415)-0.06 (-1.317) EDMEAN-0.149 (-0.098)-0.003 (-0.215) EDSD7.68 (3.603)**0.059 (2.905)** EDCV70.97 (3.826)**0.58 (3.339)** Adjusted R 2 0.7190.7200.3540.371 F29.1943.307.0310.74 Regression of income inequality on income and education variables N=34 LnCapita: natural logarithm of per capita income Numbers in parentheses are t-values. ** The variable is significant at the 0.01 level and * The variable is significant at the 0.05 level.

11 Summary  A higher levels of income and education have an equalizing effect on income distribution  The dispersion of schooling has a disequalizing effect on income distribution.  Both LnCapita and EDSD (or EDCV) are statistically significant in explaining the poverty rate.  only EDSD(or EDCV) can explain the Gini index well.

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