Investment In Education And Income Distribution Study

As China's rapid economic development, as well as the income gap between rich and poor is too deep and this contradiction has become increasingly prominent.so issue of income distribution has become a focus of academic attention. Factors affecting the distribution of income are diverse, the importance of each factor, as well as ways to influence the distribution of income are not the same. This paper examines the concept of human capital,on this basis concluded that the investment in education is an important way to human capital development. With Schultz as the representative of the human capital theory, research shows that Education has seriously affected the growth of personal income. Therefore, education on income inequality should have a significant impact. This article examines two aspects of the educational investment,that is equalization of educational opportunity and education expansion.The equalization of educational opportunities for the improvement of income distribution effects, most studies is in the affirmative,but the influence of expansion of education to income Distribution is controversial. Article discusses a variety of viewpoints, analysis of data from the 30 provinces by econometrics, agree Inverted U-Theory and show that education expansion and income distribution is not a simple linear relationship, but rather similar to the inverted U-Theory named Kuznets. We must point out that the answer to this question is not only necessary, but is very important to clarify our policy of income distribution and education of the selection and design.To make sure that how did education expansion affect income distribution,the paper use Educational distribution and the rate of return to education as variables. Meanwhile use theoretical models of human capital and selected 30 province's Panel Data in China from 2005 to 2007. so build models about the urban-rural income gap, the gap between urban and rural education and education expansion. Think that the education expansion has not narrowed but widened income gap between urban and rural income, which means our country is still at an "inverted U" shaped curve to the left, had not crossed the inflection point, with the expansion of the level of education, the income gap may be further widened. On this basis, the paper analysis the relationship between educational expansion and educational inequality and the differences of rate of return to education between urban and rural, believing that in our study where education expansion widened the educational gap between urban and rural areas, to some extent this expansion effect explain why the expansion of the educational enlarge the income gap. Analysis concludes that rate of return to education of urban residents was significantly higher than that of rural residents, in rural the rate of return to education is low.Based on the above analysis of the article eventually draw the following policy recommendations:1. adhere to policies to expand the education to promote the further development of education;2.to increase educational opportunities for low-income population, promote equality of educational distribution; and to supporting the implementation of taxation policies and measures.