Reducing income inequalities through government expenditures on education. Evidence for European countries

This study examines the role of government spending on education in mitigating income inequalities. The study uses dynamic panel regressions to assess the evolution of education expenditures and income inequality in the sample of 30 European countries between 1995 and 2018. Our findings show that increases in government spending on education positively affect income inequality reduction. The impact was more substantial in case of less developed economies and countries with initially higher level of income inequalities, which stands for total expenditures on education, but also expenditures allocated to secondary and tertiary education.