When education is positional: higher education expansion, welfare regimes and income inequality

Abstract Rectifying the imbalance of theorisation of education expansion focusing on its benefits, this study examines the relationship between education expansion and income inequality by turning our attention to its risky aspects. We investigate how expanding education might not effectively mitigate income inequality, because it brings about costly and risky competition for the positional value of education. We consider welfare regimes as relevant institutional factors associated with educational positionality based on the similarities between two environmental conditions that make education positional and two underlying dimensions of welfare regimes (de-stratification and commodification). We analysed higher education cases in twenty-four to twenty-five developed countries from 2000 to 2020. Our results show that higher education expansion initially reduced income inequality, but the reducing effect was attenuated, and eventually, it increased income inequality when higher education was positional, corresponding to the countries with a liberal regime and two East Asian countries such as Japan and Korea.