Education level and income attainment inequalities: A service ecosystem perspective

Rosalba Manna, Maria Vincenza Ciasullo, Silvia Cosimato, Rocco Palumbo

Abstract


Purpose. The ecosystem view is a fascinating perspective, which provides managerial scholars with innovative conceptual tools to investigate the functioning of complex service systems. This paper focuses on the education service ecosystem “mega” level to explain the relationship between education attainments and income disparities across Europe.

Methodology. Data were collected from the European Union Statistics on Income and Living Conditions (EU-SILC). Data trends over the time period (2007-2010) were investigated, involving 27 European Countries; unobserved time-invariant heterogeneity was controlled and dynamics over time were followed. A random effects model was estimated for each Country: in particular, random effects model allow to conduct regression analysis, especially when the units of analysis are randomly selected from a large population, as in the instance of dataset. The semi-log functional form is informed by Mincer (1974) human capital models, which this study extended to other explanatory variables.

Findings. Education levels were found to be a predictor of income inequality in all the Countries included in this research, i.e. higher education level leads to higher income and vice versa. However, the effect of education attainments on individual earnings was irregular. Eastern European Countries, inter alia, revealed a strong relationship between education attainments and individual earnings, whereas Scandinavian Countries showed a weak link between education levels and income.

Practical implications. Education has the potential to affect income inequalities in Europe. Policy makers should devise tailored strategies to deal with the consequences of education attainment on individual earnings. Both education services’ quality and the interaction between education and other socio-demographic variables may influence income inequality in European Countries.

Originality/value. This is one of the first attempts to investigate the relationship between education levels and income inequalities in light of the service ecosystem perspective. Further conceptual and practical developments are needed to better explain the effects of education attainment on income inequality from an ecosystem point of view.


Keywords


education services; income inequality; ecosystem view; awareness; patient empowerment

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References


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