Education and Income Inequality in Hong Kong

Irrespective of the stages of economic development, most governments around the world are facing income inequality problems and are searching for a fix. There is a general perception that the provision of education opportunities to the younger generation can reduce income inequality. However, this general perception does not receive strong support by scholars. In the literature, empirical evidence collected by numerous researchers is mixed. Hong Kong, a culturally diverse and economically well-developed city economy, has undergone rapid economic development in the last few decades. It underwent structural change from an entrepôt to a labor-intensive manufacturing economy and finally became a service-oriented city economy. The Hong Kong story does not support the view that that making higher education more accessible to youngsters can help narrow income disparity. In fact, the evidence from the Hong Kong population census and by-census samples shows that well-educated workers experienced higher income dispersion than those workers with a lower educational level. Policymakers are advised not to rely on expanding higher education opportunities to alleviate income inequality problems.