This seminar will present recent research the relationship between economic inequality and educational achievement as measured by large scale assessments. We begin by identifying a debate within the literature between those who advocate a “skills premium” for achievement and those who warn against the harmful consequences of inequality for achievement. We use a more extensive empirical dataset and more robust statistical models to show that the relationship between achievement and inequality is moderated by income: in other words, the relationship is different in high-income and low-income countries. The former demonstrates a relationship consistent with the “skills premium” literature, while the latter suggest that inequality has negative consequences for achievement. We then evaluate possible models of the causal relationships involved, looking at varieties of capitalism and capabilities as two alternative explanatory frameworks.