Research On Relationship Of Education And Medical Treatment Public Goods Supply And Urban-rural Income Gap

Since three decades of reform and opening-up, China's economy has developed with a high speed, and historical changes have taken place in economic strength and people's livelihood. China has basically achieved dual-transitions from a planned economic system to a market economy system and from a low-income country to a middle-income country. China has created an economic miracle.Meanwhile, during the process of economic reform and development, China is confronted with some important structrural problems. Firstly, in the long-standing urban-bias system of education and medical treatment, education and health care public goods of urban residents are far than that of rural residents wholely. The gap of urban-rural education and medical public goods has firstly increased and secondly decreased since the economic system reform, however the gap remains huge today. Secondly, although the marginal increase of the urban-rural income gap in China decreases in the recent years, the urban-rural income gap in our country has continued to expand as a whole since 1978. Thirdly, our country's dual economic structure continued to worsen before the economic system reform. The dual economic structure began to improve after the economic system reform, but till now, dual structure still is an obvious feature of China's economy.The three typical facts are interdependent and interrelated and affect China's economic development deeply.The urban-bias system of education and medical treatment is an inevitable choice for a development country with the kind aim such as the industrialization and modernization. At the lower history stage of economic development, the system played an important role in speeding up the industrialization. At the same time the theories and facts show that the urban-bias system of education and health care caused the gap of efficiency and the flight of agriculture capital and the increase of the urban-rural income gap. Reverse the urban-bias system of education and health treatment and reduce the gap of urban-rural education and health care public goods is a crucial problem for our country to transfer of rural surplus labor and to achieve sustainable development, successfully to build a new socialist countryside and to construct a socialist harmonious society. In addition it is a major theoretical and practical issue during the process of economic reform and development.Retrospecting the research, we find that the externality of education and medical treatment and the complexity of dual-economy growth, the effect of education and medical public goods to human capital formation were ignored.Nobody analyzed the dynamic relationships among the gap of urban-rural education public goods, medical public goods and the urban-rural income gap.They did not analyze the contribution degree of all kinds of factors to the urban-rural income gap. Under the background of a dual economy,this paper constructs a model of dual-sectors to analyze the dynamic relationships of the gap of urban-rural education and medical treatment public goods supply and the urban-rural income gap,measures the contribution degree of all kinds of factors and puts forward the policy suggestions.The innovation:Firstly, the author constructs a model of dual-sections to analyze the dynamic relationships of the gap of urban-rural education and medical public goods supply and the urban-rural income gap under the background of dual-economy.With dynamic programming and Ramsey model the author draws a conclusion that non-farm sector will achieve a steady endogenous economic growth and farm sector will not achieve it because of the impact of growth of non-farm sector and policy of government. Back to Solow model, the author finds that the growth rate of farm section will converge to that of non-farm sector. The speed and path will be decided by a few exogenous variables such as initial endowment of farm sector and tax rate of public goods as well as the investment ratio of farm sector public goods. To increase tax rate of public goods and investment ratio of farm sector help to accelerate the convergency and to defer the increase of the urban-rural income gap. The author also finds that the urban-rural income gap never decrease if there are farm sector investment of public goods in the initial condition of the shortage of farm public goods and the huge gap of urban-rural income. Only when the farm sector obtains a strong shock from the government and the adequacy ratio of public goods in agricultural sector is greater than the critical point of the adequacy of rural public goods, the urban-rural income gap will decrease. Especially, when farm sector achieves to the given public goods sufficiency rate, which is large enough, the urban-rural income gap will decrease to zero and remain constant.Secondly, on the base of the national time series and the dynamic property of VAR, the author analyzes how the gap of eduation and medical treatment disturbs the urban-rural income gap with impuls response function method, and analyzes the factors and degree of contribution. Also the author analyzes the relationship between the gap of public goods supply and that of income on basis of panel data of the provinces. The author finds that the gap of public goods supply of education and medical treatment is a main reason to expand the urban-rural income gap. In contrast with the medical treatment gap, the education gap has more great influence on the income gap and has a lagging effect. The fluctuation of the education gap forms 20% of that of the income gap, the influence will last quite a long time.Thirdly, we use G·Fields decomposition method to measure the contribution degree of the urban-rural income gap to the overall income gap with panel data innovatively, and find the contribution degree reaches about 60%. Moreover the author uses Oaxaca-Blinder decomposition method to measure the contribution degree of urban-rural education gap, urban-rural medical treatment gap, urban-rural investment and urbanization to the urban-rural income gap innovatively. The author finds that the direct contribution degree of urban-rural education gap exceeds 13% and that of urban-rural medical treatment gap keeps 1%. Their integrative contribution degree will be huge if we add the indirect contribution from the interaction among education public goods supply and medical public goods supply and investment and structure transfer of dual economy.The structure:Chapter One is introduction. This chapter is mainly concentrated on the background, the significance, the methodology, the structure, the innovation and the insufficiency of this dissertation.Chapter Two reviews the literatures.And in Chapter Three, the author measures China's urban-rural income gap and dual economy and finds two typical facts.In Chapter Four, reviewing the course of the urban-rural education and medical treatment system reform and measuring the gap of urban-rural education and medical treatment public goods, the author finds the third typical facts.In Chapter Five, the author constructs a model of dual-sections to analyze the dynamic relationships of the gap of urban-rural education and medical treatment public goods and the urban-rural income gap under the background of dual-economy.In Chapter Six, the author uses empirical analysis to test the theory with time series of the whole country and panel data of the provinces.In Chapter Seven, the author uses G·Fields decomposition method to measure the contribution degree of the urban-rural income gap to the overall income gap and uses Oaxaca-Blinder decomposition method to measure the contribution degree of urban-rural education gap and urban-rural medical treatment and urban-rural investment and urbanization to the urban-rural income gap.The last chapter is conclusion and suggestions of my thesis.