Wage inequality

Abstract

Labour earnings, particularly wages, are the main source of household income, and thus a key determinant of distributional inequality in the region. Education remains the most important determinant of wage levels. Accordingly, most of the concentration of wage incomes stems from educational differences among the population, in terms of both years of schooling and the economic returns on each additional year of studies. To move towards a more equitable distribution of opportunities and incomes, it is essential to put greater effort into raising the quality and relevance of education, particularly at the secondary school level, to effectively develop the skills that are needed for employment and provide an adequate preparation for access to higher education.