Inequality Of Opportunity, Economic Growth And Education In China

Theoretical and empirical studies exploring the effects of income inequality upon growth reach a disappointing inconclusive result. This dissertation is aimed at explaining the controversy in China from the perspective of opportunity and discusses how China's opportunity inequality is formed further. According to Roemer (1993,1998), income inequality is divided into two parts:first, the reasonable part is called the "inequality of effort"; Second, the unreasonable part is called the "inequality of opportunity". The public wouldn't rather accept the inequality of opportunity than inequality of effort and the important goal of public policy is to provide every member with equal opportunities. So, only by grasping the trend of inequality of opportunity accurately in China, can we have a deeper understanding of China's widening income gap and test whether there is a deviation of the policy on adjusting the income gap. Finally, it would promote social fairness and sustainable development of economy. At present, the scholars study from the perspective of "outcome inequality", namely income inequality and ignore the importance of opportunity inequality. Therefore, This dissertation researches the relationship between China's economic growth and inequality of opportunity by combining the micro and macro data empirically for the first time, and explore the underlying causes of inequality of opportunity based on education, and evaluates the influences of the higher education enrollment expansion policy on inequality of opportunity. Specifically, the main contents and conclusions are as follow:First, using CGSS2003,2005,2006,2008,2010,2011,2012 and 2013 micro data and the nonparametric measurement that Ferreira & Gignoux(2011) put forward, this dissertation estimates the inequality of opportunity and efforts of inequality of 26 provinces of 8 years in China. The results show that the proportions of inequality of opportunity among the income gap in2003,2005,2006,2008,2010,2011,2012 and 2013 are 39.92%,48.16%,48.71%,50.05%,52.40%,49.21%,44.06% and 43.52%, respectively. On average, the proportion reaches 47% and it is higher than other countries significantly. At the same time, there was a positive relationship between the inequality of opportunity and overall income inequality, and inequality of effort first increases and then decline with overall income inequality rising.Second, this dissertation explores the relationship between China's economic growth and inequality of opportunity, efforts of inequality from both theoretical and empirical perspective, combing the China's provinces'macro data with the estimated inequality of opportunity and inequality of effort values. The empirical results show that the relationship between China's economic growth and inequality of opportunity presents the inverted "U" shape and there is a significant positive relationship between economic growth and inequality of effort. This study fills up the blank of relevant domestic literature.Third, the educational inequity is the most inequitable in society. This dissertation studies the underlying causes of the formation of inequality of opportunity empirically from the perspective of education. On the one hand, this dissertation analyzes the college entrance opportunity inequality among the different groups empirically, using the Logit model. On the other hand, this dissertation studies the different return to college education among the different groups empirically, using the extended Mincer income equation and the cross-terms between the external environments and the college education. The empirical results show that family background, household registration system, gender and region play an important role in forming the China's inequality of opportunity, whether it is the opportunity to enter the college or the return to college education after graduation. It also demonstrates that it's difficulty to have outstanding children in a poor family.Fourth, this dissertation evaluates the impact of college enrollment expansion policy on the inequality of opportunity in China. On the one hand, this dissertation analyzes the impact of college enrollment expansion policy on the college entrance opportunity inequality among the different groups empirically, using the Logit model and the cross-terms between the external environments and the college enrollment expansion. On the other hand, this dissertation studies the impact of college enrollment expansion policy on the return to college education among the different groups empirically, using the difference-in-difference method. The empirical results show that expansion of higher education does not reduce the degree of China's educational inequality, and on the contrary, it may get worse. Therefore, with the expansion of higher education, other supporting policies are needed so that it is possible to reduce the degree of educational inequality in China, and then to ease the inequality of opportunity.Fifth, based on the above researches and analyses, this dissertation argues that the government should focus on two aspects to reduce the inequality of opportunity. First, to promote educational equity from the "quantity fairness" to "quality equity". Second, to get through the channel from education to employment and build an equal opportunity employment market environment. And other relevant supporting policies are put forward.In a word, this dissertation contribute to understand the income inequality more deeply, to measure the degree of inequality of opportunity, to explore the relationship between economic growth and the inequality of opportunity empirically, to reveal the underlying causes of the formation of the inequality of opportunity based on education, to evaluate the impact of college enrollment expansion policy on the inequality of opportunity, to formulate the corresponding public policies and to promote China's sustainable development ultimately. Meanwhile, this dissertation also makes a useful supplement to the research of misallocation of talent.