The Effect of Educational Inequality on Employment in Iran's Provinces

One of the most effective ways of realizing social equity is to provide equal opportunities for individuals to access education and to achieve educational equity. An important aspect of educational equity appears in the labor market and by the end of the education.  The processes of finding a job in the labor market and wage determination guide the efforts of individuals for gaining effective education. If the labor market does not send appropriate signals to the education system, the allocation of resources in the education system would not be correct. In this paper, the relationship between educational inequality and employment rates in Iranian provinces is examined by using Generalized Momentum Method (GMM) for a panel data of 28 provinces during 1380 - 1392. The employment rates and Gini coefficients of education are calculated from the income-expenditure data, published by the Statistical Centre of Iran. The results of this study show that average educational Gini coefficient, educational inequality, in deprived provinces is higher than rich provinces; and there is a negative and significant relationship between employment rate and educational inequality. In all provinces the employment rates has increased while the Gini coefficients has decreased.