Research On The Effect Of Public Education Spending On The Intergenerational Income Mobility In China

Intergenerational income mobility is an important indicator reflecting the intergenerational transmission of income gap and equality of opportunity.A low level of intergenerational income mobility means that the offspring's income is largely dependent on their parental income,which calls the "like father,like son".In contrast,a high level of intergenerational income mobility means that personal achievement mainly depends on their own efforts and has no relationship with their family backgrounds,which stands for social fairness and economic efficiency.In recent years,the phenomenon of "second generation","fight father","consolidated social hierarchical system" and "difficulty in upward mobility of the bottom people" indicate that the intergenerational income mobility in China is declining.With the profound changes in our society,people have increasingly demanded for social fairness,thus improving intergenerational income mobility of China is an urgent matter.Equality of opportunity and equality of income are the two major goals of the government public policy.What kind of government public policy can improve the intergenerational income mobility? Education is widely considered as an important mechanism of intergenerational income transmission.An increase in educational attainment is an important method for individuals to achieve upward mobility by getting out of hierarchical constraints and obtaining equal employment opportunities.Then,whether government intervention in education can promote intergenerational income mobility? Can public education expenditure,as a government policy to promote education fairness,improve the intergenerational income mobility? So far,investigation on the intergenerational income mobility at home and abroad mainly focuses on the intergenerational income elasticity calculation and the decomposition of intergenerational income transmission mechanism.Reports on the influence of public education expenditure on intergenerational income mobility are scarcely.Against this background,this paper attempts to investigate the effect of public education expenditure on intergenerational income mobility in China through theoretical and empirical analysis,and then propose a policy aiming to improve the intergenerational income mobility by adjusting the public education expenditure based on the existing problems of public education expenditure in China and international experience.The main contents of this paper include the following:First part: theoretical analysis.On the basis of a comprehensive review on intergenerational income mobility and public education expenditure at home and abroad,the mechanism of public education expenditure influencing intergenerational income mobility is systematically analyzed from various perspectives in the present work.Firstly,the mechanism of intergenerational transmission of human capital is refined and decomposed to establish a framework for analyzing the influence of public education expenditure on intergenerational income mobility.Secondly,we analyze the influence of public education expenditure on intergenerational income mobility from social,family and individual aspects.On the social level,public education expenditure could promote intergenerational income mobility by alleviating social income inequality.On the family level,the public education expenditure could affect the intergenerational income mobility by narrowing the gap in human capital investment of different families.On the individual level,public education expenditure could affect the intergenerational income mobility through the promotion of individual human capital.Finally,we build a mathematical model and further analyze the effect of public education expenditure on intergenerational income mobility.In this part,the effect of public education expenditure on intergenerational income mobility is clarified in view of theoretical and mathematical analysis,which will be tested empirically in the next part.Second part: empirical analysis.Firstly,the result of the intergenerational income mobility in China shows that the overall intergenerational income mobility in our society is relatively low,and the intergenerational income of the low-income class in rural and western undeveloped regions is relatively strong.Secondly,we build different econometric models to examine the impact of public education expenditure on intergenerational income mobility from the perspective of society,family and individual by combining the macroeconomic data of China's public education expenditure with the micro-household survey data.On the social level,we use the simultaneous equations of provincial data to test the effect of public education expenditure on intergenerational income mobility.It is found that an increase in public education expenditure can alleviate the income inequality,and the reduced income inequality can increase intergenerational income mobility.However,the contribution of China's public education expenditure to alleviate the income inequality is relatively small.On the family level,the public education expenditure is introduced into the function of intergenerational family income transfer,and the impact of public education expenditure on intergenerational income mobility is empirically tested.The results show that public education expenditure can release the inadequate human capital investment in low-income families,thereby improving intergenerational income mobility.However,if family income is further divided into five different income levels,the effect of public education expenditure on the intergenerational income mobility at the lowest income level is not obvious.On the individual level,we construct a polynomial logit model about the direction of individual intergenerational income mobility to analyze the effect of public education on the direction of individual intergenerational income mobility,and it is showed that public education expenditure can significantly promote the upward mobility of intergenerational income among individuals.Empirical analysis from the perspective of society,family and individual demonstrate that public education expenditure could improve the intergenerational income mobility of China.Finally,the paper points out the existing problems in China's public education expenditure and their contribution to the improvement in intergenerational income mobility in term of the current China's public education expenditure.Based on that,the reasons for the existing problems in China's public education expenditure are dissected,which will be helpful for the policy recommendations.Third part: international comparison.Based on the characteristics of economic development,public education expenditure and intergenerational income mobility in various countries,this paper learns from experiences on the contribution of public education expenditures to the improvement in intergenerational income mobility in three typical countries of the United States,Japan and Finland.An overview of the relationship between public education expenditure and intergenerational income mobility was conducted,and the characteristics of public education expenditure in these three countries are summed up.In conclusion,the instructively enlightenment for China are put forward according to the characteristics of public education expenditure in various countries.Fourth part: policy recommendations.Concerning the existing problem and reasons of China's public education expenditure,this paper put forward some policy recommendations on how to improve public education expenditure and increase intergenerational income mobility on the basis of foreign experience.Policy recommendations are mainly listed as follows.Formulating well-established performance appraisal system of public education expenditure,dividing the educational responsibility of governments at all levels,increasing government financial investment in education and broadening capital sources are intended to continuously increase the scale of public education expenditure.Specifying the third-level educational investment in the form of administrative legislation,increasing investment allocation of basic education,and optimizing the investment structure of higher education are meant to reasonably determine the proportion of third-level educational expenditure.Establishing a scientific and effective public education expenditure transfer payment system contributes to adjust the unbalanced educational capital allocation between urban and rural areas,the eastern,central and western regions,which will promote the equalization of public education.