A Study On The Effect Of China’s Education Inequality On People’s Income Disparity

In recent years, with the implementation of the state’s regulation of income distribution policy, the trend of widening income inequality of China has been moderate relief, but the data shows that the current income gap is still large. Last year,the National Bureau of Statistics released the Chinese nearly a decade’s Gini coefficient, which shows that the Gini coefficient is0.473in2O13.The Southwest University of Finance conducts a study on China’s family income inequality, which shows that China’s family Gini coefficient is0.61, and the World Bank published in2010World Gini coefficient average of0.44. In accordance with the international standards, China’s current income gap is large, even in the world at a high level. How to narrow the income gap has become wider thinking social problems.Researches on the issue of China’s income gap are largely from the urban-rural dual economic structure, industrialization, globalization, monopoly and power gains. and intergenerational transfer of income perspectives. Few studies conducted from, the perspective of education. We believe that the generation of income gap is mainly due to individuals or groups on the basic factors of production rationing inequalities, and the educational inequality is a major factor. Education is the main channel for personal human capital accumulation.In the history, the United States, Brazil, India and other countries have taken improving the educational inequality to narrow down the income gap,aad have achieved good results. With the improvement in the labor market competition and mobility, individual’s ability and quality will play increasingly important role in determining their career choices and income levels. In addition, with technological development and upgrading of industrial structure, China’s social quality of talent and ability are increasingly high requirements. For low-income people which accounts for70percent of the country, improve the education quality, provide equal educational opportunity to vulnerable groups, and improve the ability of low-income populations will help more in narrowing down the income gap.Although in recent years, China has made great effort promoting education reform, educational inequality dropped significantly. Some educational Gini coefficient calculated with the average years of education indicators show that China’s education system has been very equal, but the quality and effect indicators of education still show that China’s education inequality remains high, especially in the inequality between urban and rural education and the regional inequalities,which are still outstanding, and affect China’s social harmony.Education and income distribution plays vital role in our social and economic operation, and they are both the current contradictions of our society. Therefore, we choose to put the two together, from the perspective of educational inequality explore the resons of income disparities of China. Research findings and policy recommendations will help education sector to develop more effective, still provide a reference for some sectors to make strategy to narrow down the income gap from an educational perspective. Therefore,this study has some theoretical and practical significance.The main contents and conclusions are as follows:First,gives an statistical analysis on the uneven development of China’s education.The statistical data includes the ratio of teachers to average hundred students, the classroom area per student, the finance input per student,etc.The research results show that education attainment opportunity is unequal in China. Different people can enjoy different grade education. There exists large gap between urban-rural education development and the regional development level, etc.Second, make a research on the mechanism of education on personal earning ability and the social income distribution.The research builds a model with family utility maximization containing a human capital accumulation technology. The results show that the personal income difference essentially roots in personal endowments difference. All the later life culture and education are enlarging or narrowing the gap.The income gap stemming from the endowment gap are accepted,but the gap which stems from the later life uneven culture are unaccepted.Government wants to narrow down the income gap, must provide equal education opportunity first.Then the article gives some detail analysis on the role of public education versus private education in influencing social income distribution and economic development.Third,make a research on how education affects personal income in China.The model used multinomial logit model. The sample data used CGSS2006,which is conducted by Hong Kong University of Science and Technology and Renmin University of China. The model estimated results shows that the educational attainment contributes to increase personal income significantly. The more education people attained,the more higher income level he will earn. But different levels of education can bring different returns. A primary and secondary degree could not help obtain middle and above income, but a higher college degree can brings a significant positive effects.Besides education,the gender, family economic status,occupation,nationality, place of residence,and parental education all affect personal income.But education is the most one.Forth, makes a research on the relationship between urban-rural education gap and the urban-rural income gap. It makes a comprehensive index representing the school quality. The tool is principal analysis.And the data is organized with fifteen factors which reflects school quality like the ratio of teachers of per student,the classroom area per student,etc. Then we conduct a provincial cross section model and time series model with this comprehensive index.The cross section model estimated results show that education difference has no significant effects on the urban-rural income gap. The time series analysis shows mat the education gap can not bring about current urban-rural income gap,but may course three years’later urban-rural income gap.Considering the time series analysis data was a little short, which cann’t capture the real lagged effects of education to the income gap. We turn to another model of VAR with time period from1981to2009,and the data uses the urban-rural annual per education expenditure of family.The VAR model estimated results show that education gap can enlarge urban-rural income gap with a lasting lag effects. Up to the20th period, education gap can explain36.4percent of the income gap. So the education gap can bring in enlarging urban-rural income gap for a long time.Fifth, make a research on how regional education gap affect the regional income gap with spatial econometric model. The Mantel test results proves that the regional education gap positive relates to the regional income gap. The spatial correlation test suggests we should build spatial models.The Mantel test results show that the total input difference on regional education have no relationship with regional income disparity,but the gap of per student share in each school level have strong relationship with regional income disparity. The we use stepwise regression technique with spatial model to test the effects of different school factors.The estimated results prove that the education investment can help increase the local citizen’s income level,and also help ease the enlarging trend of regional income gap. The estimate results suggests that the regional physical capital investment gap is fundamentally the most important reason causing regional income gap. So reducing the regional education investment gap can help reduce the regional income gap.Sixth,considering education input can contribute regional economic growth, then directly influence the personal income. We make some research on the revenue of education investment to regional economic growth with provincial panel data model. When set the model,we consider the random shocks may exist influencing the accuracy of the model,we make some adjustment with the error term.Then using the adjusted panel model to estimate the revenue of education investment.The estimated result shows that revenue is great that the average level may up to0.2,which means one percentage increase of finance education input can bring about0.2percentage of economic growth.But this effect varies from province to province. The regional revenue is higher in eastern and western region,but lower in central region.And even in the same region,the revenue may have huge difference.The difference may due to resource endowment difference, culture characteristic,the current growth rate,etc.But the random shock influence is also a great factor.In all, education investment can greatly contributes to local economic growth. So education input difference is a potential factor leads to regional income gap.Finally,the article makes conclusion about the thesis, tell about the further research content,then gives some suggestion on reducing the social income gap and promoting the education system healthy development.