Better education for women will cut income inequality, not increase it

PUBLISHED : Friday, 01 July, 2016, 12:49pm
UPDATED : Friday, 01 July, 2016, 11:25pm

We refer to the article, “How educated women increase income inequality” (May 3), by Professor Richard Wong Yue-chim. While we applaud the author for raising the important issue of women’s education and for summarising existing findings, we believe that this article and its title mistakenly leads the reader to attribute a host of societal ills to women’s education.

The link between women’s economic rise and household income inequality is perplexing. It is attributed to two factors: assortative mating and family breakdown. The principle behind assortative mating appears to be that women who are educated marry educated men and this increases their overall household income. Those who are uneducated marry uneducated men and this leads to lower household income. Although such a model has been tested using US data, the objective was to understand why income inequality exists at this point in time.

Women’s education and their consequent economic rise is just one factor to explain this difference in US household income inequality. To use this finding to model policy recommendations or to portray women’s education as leading to a variety of social and economic problems is inappropriate. Consider what would happen if 100 per cent of the women were educated? Wouldn’t this increase overall household income and reduce household income inequality? The strongest policy recommendation that actually emerges from a marital sorting model is that the government should invest even more in women’s education at the lower economic levels than it currently does.

The link between women’s economic rise and family breakdown is also puzzling. Even though the increase in divorce is highest in the lowest income quartile for the years between 1981 and 2011, one cannot attribute this increase in divorce rate to women’s education. There have been many changes in Hong Kong society between 1981 and 2011, and any of these could have contributed to the differential changes in divorce rates.

Given that income levels are strongly correlated with the mother’s education level, we need institutional support to help women from low-income families achieve their dreams of a better future.

The government should invest even more in women’s education than it currently does. Not only will this eventually reduce household inequality, it will also improve the quality of the labour workforce, increase household incomes and improve our children’s outcome.

Professors Rashmi Adaval, Cameron Campbell, Pascale Fung, Amy Dalton, Vidhan Goyal, Ajay Joneja, Dekai Wu, Xu Jiang, on behalf of 46 faculty members from the Hong Kong University of Science and Technology (full list of names http://wfa.ust.hk/n.html)