Education, economic inequality and the promises of the social investment state

Since the mid-1990s, there has been a debate about the social investment state model in advanced societies. Such an orientation towards preventive investment in education rather than redistribution (or social spending) raises the question of whether, and if so, what kinds of relationships exist between educational and economic inequalities. Based on an international comparison of 20 advanced economies, the results of the analyses suggest that the role of education as an 'equalizer' should not be overestimated. Direct redistribution is much more likely than education to combat poverty in advanced societies. Yet increasing the mean literacy rate by reducing the proportion of low-literate adults is also positively associated with less economic inequality. Welfare states with 'double liability'-investing in children's education and in more equal family conditions-therefore perform best in terms of economic inequality.