In this paper, the effects of different levels of education on income distribution are investigated - in terms of between and within groups- with generalized entropy decomposition method by employing 2008 Household Budget Survey data. According to the findings, 20.49 per cent of total income inequality result from within-group, but 79.51 per cent of it proceeds from between-group income inequality. It is observed that as the most disturbing effect comes from primary school, it decreases at middle school and primary education levels. The intergroup inequalities of general high schools and vocational high schools are nearly in the same proportion. The income inequality of four years collage graduates is more than that of two years college graduates. This finding might be associated with parameters such as difficulties in the entry into the labor market, different qualifications of demands of labor market and acquired qualification via education, and the wage differentials between private and public sector. The reason that the income inequality of illiterate population within in the group might be the fact that their average income is already low and they work in low skilled jobs.
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