With the increase in the education level, the inequalities of income reduce because the educated persons have more ability and skills and so they can earn better. They can utilise the inputs in the best possible manner which increases the productivity as well as with help of education they can earn better which improves the standard of living and the quality of life.

The increase in the literacy level reduces the inequalities in income and wealth and this benefit of education has forced the Government of various countries to invest more and more in the education sector.