The Education–Income Divide: What Needs to Change?

There’s a quiet truth I’ve noticed in economics classes and beyond: education isn’t just a stepping stone to better income, it’s often the gatekeeper. The irony is that the very thing that can lift people out of poverty is also the thing that’s hardest to access if you’re starting with less.

Linking it to my A-Level Economics studies, education is a merit good. It has positive externalities and benefits not just the individual but society through higher productivity, innovation, and social mobility. Yet, without government intervention, markets tend to underprovide it, especially to those who need it the most and would benefit the most.

UNESCO reports that 251 million children and youth are still out of school, with the highest proportions in low-income countries (“251m Children and Youth…”). The OECD finds that adults with a tertiary degree earn, on average, more than 50% higher wages than those without (“Earnings by Educational Attainment”). That’s the textbook “positive externality” in action.

I’ve seen the other side of this in my studies. Courses like Columbia’s Economics of Money and Banking and Yale’s Financial Markets frame education as a form of human capital, an investment whose returns compound over a lifetime. The challenge is that for low-income families, the “initial capital” to invest in education simply isn’t sufficient. That’s the poverty trap: low income limits access to education, which limits future income, keeping the cycle intact.

Of course, money isn’t the only barrier. Digital access or the lack of it is a huge factor. Even the best public policy can’t close the gap if students can’t join online classes or download resources. This is where platforms like ZNotes are quietly revolutionary. By providing free, high-quality study materials, they cut one of the hidden costs of learning: the price of good production.

Breaking the education–income divide will take more than one fix. Governments can rethink funding models and improve their planning so resources flow where they are needed most. Proper allocation of resources can benefit the economy as a whole. For example, a government could use its budget to improve access to education, upgrade infrastructure, and provide incentives for teachers to work in underdeveloped areas. Finland offers a strong example, having invested heavily in equitable school funding, high teacher salaries, and rural education programs: policies that have led to one of the world’s most effective education systems. In the long run, these policies benefit both the economy and its citizens. When combined with a progressive tax system, it can also help reduce income inequality. However, this would only work in a picture-perfect scenario; the real world always involves more variables and complexities.

Access to technology should be treated as basic infrastructure, not a luxury. In today’s day and age, this is crucial if we want to build a brighter future where humanity can keep moving forward and strive to improve.

While major changes may take time, we, the future generation can start making an impact now. Small gestures such as sharing educational resources, building peer-to-peer study networks, and leading student initiatives can have a positive impact and lead to a lasting change. ZNotes proves that students are not just passive recipients in the education system; we CAN be part of and be active drivers of the solution.

Because at the end of the day, closing the gap isn’t just about fairness, it’s about unlocking the talent, ideas, and potential that inequality keeps on the sidelines.

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Works Cited

251m Children and Youth Still Out of School Despite Decades of Progress – UNESCO Report: https://www.unesco.org/en/articles/251m-children-and-youth-still-out-school-despite-decades-progress-unesco-report

Earnings by Educational Attainment. OECD Data, 2023:

https://www.oecd.org/en/topics/sub-issues/earnings-by-educational-attainment.html