Elitism in higher education and inequality: Why are the Nordic countries so special?

This paper shows that countries with high levels of "elitism" in higher-education are the countries displaying high levels of inequality. In other words, a higher level of "elitism", i.e., large gap in quality of universities, and tight selection in top universities leads to a wider gap in wages between the tradable and service sectors, which leads also to a higher Gini index. This paper shows that the Nordic countries display lower elitism in higher education as well as lower inequality than most of the other OECD countries.