The Impact of Public Tertiary Education Expenditures on Income Distribution: An Empirical Analysis for Turkiye

Income distribution constitutes one of the core issues in the literature, discussed within the dual frameworks of efficiency and equity. From a theoretical perspective, education expenditures are expected to mitigate income inequality by enhancing human capital and promoting equal opportunities. However, empirical evidence on this relationship remains inconclusive. While several studies report that education spending contributes to a more equitable income distribution, others contend that expenditures at the tertiary level may, in fact, exacerbate existing disparities. Against this background, this study investigates the impact of public tertiary education expenditures on income distribution in Türkiye over the period 1995–2024. The analysis employs extended Fourier-based co-integration and causality approaches that explicitly accounts for structural breaks. The findings indicate that public tertiary education expenditures intensify income inequality in long run. Furthermore, the causality analysis reveals bidirectional predictive causality between public tertiary education expenditures and income inequality, indicating that past values of these variables provide statistically significant information for predicting each other over time. This result suggests that increases in public tertiary education expenditures as a share of GDP are not necessarily accompanied by improvements in income distribution, highlighting the importance of how these resources are accessed and distributed across society. Accordingly, the distributional consequences of tertiary education spending should be evaluated not only in terms of expenditure volume but also with respect to equality of access and underlying structural conditions.