How redistributive policies reduce market inequality: Education premiums in 22 OECD countries

Weisstanner, David; Armingeon, Klaus (2018). How redistributive policies reduce market inequality: Education premiums in 22 OECD countries. Socio-Economic Review, 18(3), pp. 839-856. Oxford University Press 10.1093/ser/mwy018

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What explains the large cross-country variation in the wage premium for higher education? Economic analyses of wage differentials by education point to technological change and globalisation, but we know little about the impact of different types of public policies. We argue that public education spending and tax-transfer policies contain the spread of “education premiums” through material incentives (decommodification) and attitudinal responses, i.e. changing attitudes towards education premiums and the motivation to request a maximum return on individual investment in education. The empirical analysis relies on a new dataset of education premiums constructed from Luxembourg Income Study surveys, covering 22 OECD countries between 1989 and 2014. We provide evidence that taxation levels and public education spending particularly affect education premium levels and changes within countries. For the literature on income inequality, these findings imply the need to pay attention more systematically to redistributive policies shaping the “market” distribution of incomes.

Item Type:

Journal Article (Original Article)


03 Faculty of Business, Economics and Social Sciences > Social Sciences > Institute of Political Science

UniBE Contributor:

Weisstanner, David, Armingeon, Klaus


300 Social sciences, sociology & anthropology > 320 Political science




Oxford University Press




David Weisstanner

Date Deposited:

02 May 2018 12:42

Last Modified:

05 Dec 2022 15:12

Publisher DOI:



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