Income Inequality

In class when we talked about years of schooling among Whites and Blacks, we were making the assumption that one extra year of schooling corresponded with about a 7% increase in wages. There was convergence of incomes of Whites and Blacks. Lately, there's been a lot of talk with the Occupy Wall Street movement where most of the wealth is in the hands of the richest 1%. Greg Mankiw's blog mentions Paul Krugman's claim that the income inequality is not due to educational differences because even with about a 10% in income with an additional year of education, the average person can't catch up to the 1%. The reasoning for that was because with an additional year of schooling, more opportunities open up. For more information,

http://gregmankiw.blogspot.com/2011/11/educating-oligarchs.html