The Capability to Reduce Inequality via STEM Occupations: The Case of Ecuador

ABSTRACT This study examines the relationship between labor income inequality, higher education, and STEM occupations in Ecuador from 2009 to 2013 and from 2014 to 2019, considering techniques, degrees, and postgraduate education. It analyzes the “composition effect” and the “structural effect” using the recentered influence function (RIF). The “composition effect” measures how much inequality increases due to the influx of more workers with higher salaries. Conversely, the “structural effect” measures the extent to which inequality is reduced by increasing the total resources allocated to the wage bill and how these resources are redistributed. The results show no evidence of a structural effect of higher education from 2014 to 2019. The “structural effect” does not occur in STEM fields. The inability to reduce inequality in STEM occupations in Ecuador is linked to the economy's structural limitations and the institutional framework of the Andean country.