While consistent with early cross-country analyses (e.g. Perotti 1996, Deininger and Squire, 1998) such a simple correlation is not in itself confirmation of the human capital accumulation theory (theory b above). To test this, it is necessary to see whether the sign and strength of the relationship between inequality and education varies across individuals depending on their socio-economic background. More generally, results based on cross-country variation (including the so-called “Gatsby Curve”, which plots the relationship between inequality and earnings mobility in a subset of OECD economies) are likely to suffer from biases induced by observed and unobserved time invariant country-specific confounding factors.