ABSTRACT
This paper attempts to explore the relationships between educational development, earnings differentials and earnings distribution,. Initially it is argued that for such analyses, lifetime earnings are a superior measure to average earnings and this is followed by a discussion of the data sources used here—age-education-earnings streams from rate of return to education studies in ten countries—and their limitations. Earnings streams are then discounted and presented in ratio form as the basis for comparison. The pattern of these ratios which widen as we move from high to low income countries is then discussed. In the final section an illustrative example is developed from data for three countries of a ‘potential’ earnings distribution for the whole labour force differentiated by educational level.
