Dawood Mamoon2012-01-312012-01-312012International Journal of Education Economics and Development 2012 - Vol. 3, No.1 pp. 1 - 9https://escholar.umt.edu.pk/handle/123456789/445The paper analyses the relationship between the popular Barro and Lee (2001) 'average years of schooling' with income inequality, wage inequality, and income deciles and income percentiles for the sample of developed and developing countries. The results suggest that countries where students complete higher numbers of years of schooling on average also perform better on relative incomes meaning that increase in average income comes from improvements in the earning capacity of the lower income groups or unskilled labour. The paper also finds that an educated population means that there is redistribution of income from the rich to the poor creating thriving middle class.enEducationWage InequalityIncome InequalityEducated PopulationIncome RedistributionEarning CapacityLower Income GroupsSchooling YearsArticle