Regional convergence of income and education: Investigation of distribution dynamics

Recent US studies find that regional education levels diverge and that this can explain the decline of income convergence. The paper challenges the suggested relationship between movements in the distributions of income and education based on Norwegian data. Kernel density functions and Markov chains are applied and a test is undertaken of co-movements in the distributions of education and income. Education levels converge and are equalised across the country, and this process coincides with income convergence. However, the test indicates that transitions in the income and education distributions are basically unrelated. The education level increases in large cities with limited income growth and the income growth is strong in regions with continued low education level.