Family background, secondary school and university prestige: Contributors to income inequality in Chile

There is strong evidence that expansion of university enrolment contributes to economic growth. Less clear, however, is whether that expansion will reduce income inequality. Human capital theory argues that education provides graduates with the knowledge and skills to be more productive. As more students from disadvantaged families graduate from universities, the theory states, the effect will be greater income equality. If, however, salaries depend on characteristics linked to graduates’ social origin, expansion can perpetuate inequality. This study examines the relationship between salary on graduation from university, and mother’s education, prestige of secondary school and university attended, and graduates’ perceptions of the quality of the university program completed. Data were collected from a sample of students in two degree programs in three universities in Chile. Salaries for graduates in psychology were unrelated to any of the independent variables. Salaries for graduates entering teaching were higher for those who attended more prestigious secondary schools.