Income Gap's Impact On Household Education Expenditure At Primary And Secondary School Stage

In recent years,the growth trend of household education expenditure at Primary and Secondary school stage in our country is obvious,especially the shadow education expenditure has experienced a substantial growth.Through the calculation of CFPS data after eliminating price factors,the mean value of family per capita education expenditure at Primary and Secondary school stage is 1634.49 yuan at 2009,and increased to 2779.12 yuan at 2013,the corresponding growth rate is nearly 70%;the mean value of family per capita shadow education expenditure at Primary and Secondary school stage is 1328.03 yuan at 2009,and increased to 2638.78 yuan at 2013,the corresponding growth rate is nearly 98.7%.The growth of shadow education expenditure has caused many problems,including: a heavy economic burden to household,an influence on students' mental health and education equity,and so on,and such situation has drawn all social circles' s attention extensively,the issues of household education expenditure at Primary and Secondary school stage is mentioned and discussed again and again.In fact,from the short term,household education expenditure is a kind of consumption;from the long term,household education expenditure is a kind of investment,the families hope that their children can achieve a higher education background,a higher income and a higher social status,and family's social status can be improved at the meantime to a certain extent,and finally maximize the long-term utility,therefore the current education expenditure is relevant closely to the future social status.In addition,there is a prominent phenomenon that our nation's income gap is at a high level in recent years which has attracted my attention,and the widening of income gap will probably give rise to an educational “expenditure cascades”.Although the elements that influence the education expenditure are still many,including devaluation of university diploma due to the expansion of college enrolment in recent years,the increase of employment pressure due to the economic slowdown,and public education expenditure,parental well-being etc.that was mentioned by some other domestic researches.In addition to all the reasons mentioned above,this dissertation insists that,income gap is also a fundamental reason that caused the education comparison and the growth of household education expenditure continuously.In light of the deficiency of domestic researches,this dissertation constructs a relatively complete framework of theoretical analysis including income gap to education expenditure based on social status-seeking theory: firstly,household education expenditure is an important expenditure that is relevant to future social status,what it pursues is the maximization of long-term utility and it satisfies the life-cycle hypothesis.Secondly,under the widening of income gap,the highest income families will take the lead in increasing children's education expenditure in order to maintain or improve their families' social status;the sub high income families will increase their children's education expenditure in case of falling behind,thus the highest income families will have a “demonstration effect” on sub high income families,and there exists an “upward comparison” from sub high income families to highest income families,and so on,the “demonstration effect” will transmit step by step along the income ladder which is arranged from high income to low income,and ultimately down to the lowest income families,and there exists an education “expenditure cascades”,therefore,household education expenditure satisfies the hypothesis of interdependent preferences.Income gap strengthens the “demonstration effect” and initiates the comparison of education expenditure,thus finally gives rise to a gradual increase of the whole level of household education expenditure.The relevant empirical analysis in this dissertation is undertaken around framework of theoretical analysis mentioned above using data released by the National Bureau of Statistics and CFPS data,the main works and conclusions include:Firstly,this dissertation proved that education expenditure is linked to social status.This dissertation constructed an empirical analysis through panel ordered Probit model letting personal self-evaluation of social status be the dependent variable,letting personal education years and average education years in circumstance be the core independent variables,and found that these two independent variables have positive and negative effects to dependent variable respectively,thus we proved that education do have significant characteristics of positionality,and education expenditure is a kind of positional expenditure.Secondly,this dissertation empirically analyzed the income gap' impacts on household(shadow)education expenditure.Specifically,this dissertation investigated how the income gap influenced the whole shadow education participation rate in a province using macro data;and how other families' shadow education participation rate in a province influenced a certain family's decision to participate in shadow education using micro data;and how shadow education participation rate of the families in the top decile of income distribution influenced the other families using micro data.This dissertation found that the influences mentioned above are all positive.Next,this dissertation investigated income gap's impact on(shadow)education expenditure: this dissertation investigated how income gap influenced average(shadow)education expenditure in a province using macro data and a certain household(shadow)education expenditure using micro data successively,and found that income gap has both positive influences.Thirdly,this dissertation empirically analyzed the “demonstration effect” of higher income reference groups in terms of(shadow)education expenditure.This research found that: in terms of(shadow)education expenditure,the families in the top decile of income distribution have significant “demonstration effect” on other families;after the division of families into three groups according to family income,the high income families have significant “demonstration effect” on middle income families,the middle income families have significant “demonstration effect” on low income families,this means the “demonstration effects” transmits from high income families to low income families gradually,the household education expenditure can be characterized by “expenditure cascades”;except families in the top decile of income distribution,the extent of influences that other families receive from families in the top decile of income distribution has an increasing trend as the household education expenditure quantile decreases;finally,the urban families have “demonstration effect” on rural families.The main innovation points of this dissertation includes: firstly,this dissertation combined life-cycle hypothesis and social status-seeking theory which assumes that consumption satisfies interdependent preferences in the theoretical analysis,and insists that the current household education expenditure has relationship with future family social status.Secondly,this dissertation divided the influence of income gap on shadow education into two parts,one is the influence of income gap on participation of shadow education,another is the influence of income gap on expenditure of shadow education,and verified that there exists the phenomenon of “expenditure cascades” which occurs in household(shadow)education expenditure.Thirdly,this dissertation overcome endogeneity problem better using lagged shadow education participation rate of other families,income gap and higher income families' average(shadow)education expenditure as core independent variable in empirical model analysis.