The Long-Run and Short-Run Equilibrium Relationships between Income Inequality and Educational Inequality: A Case Study of Thailand

Abstract

              This paper aimed 1) to examine the causal relationship between income inequality and educational inequality and 2) to investigate the long-term and short-term equilibrium relationships between income inequality and education inequality in Thailand by using secondary data from 1960 to 2021. In this study, we utilized 1) The granger causality test, 2) The cointegration test, and 3) The error-correction model (ECM) to estimate this relationship. The results indicated that income inequality and educational inequality had a causal relationship with each other. From the equilibrium relationship test found that both variables used in the study showed the long-term and short-term equilibrium relationships. To clarify, an increase in Thailand’s income inequality will increase Thailand’s educational inequality and vice versa. As the economic structure of Thailand is classified as a middle-income country, the majority of income is concentrated among high-income individuals. This leads to vulnerable people with low incomes being unable to access basic educational rights. Therefore, the government should implement tax policies to promote income redistribution and provide appropriate social welfare for low-income groups.