Education And Earning Inequality

Educational variables have great influence on earning inequality.1957, the pioneer of the modern labor human capital theory--Jacob Mincer firstly used the methods of human capital investment to research personal income distribution. In his work-《Human Capital Investment and personal income distribution》suggested that, diverse polices of human capital investment decided the pattern of personal income distribution, while the difference in income among persons leaded to the difference of income distribution. Thus, overseas scholars in the domain of labor economy have conducted the thorough research on the relationship between educational variables and earning inequality, and have established a whole set of income distribution theory based on educational variables; domestic scholars started this research behind time, however, made abundant research results. Therefore, this paper focuses on how the factor of education affects earning inequality, and takes in-depth exploration and analysis.With a large collection of statistical data, this paper respectively calculates average education attainment, education inequality and earning inequality in time-series data and a panel data set of all provinces in our country for a period between 1978 and 2008. Considering our country's overall situation and regional disparity simultaneously, this paper uses time-series data and panel data to carry on the regression analysis, systematically elaborates the effects of educational variables on income distribution. Based on the regression analysis of the relationship of educational variables and income distribution in time-series data, the paper adds the logarithm of income and its square as the variables of economic growth to confirm that if Kuznets inverted-U curve is suitable for China.The main conclusions are as followed:The factors of education have great influence on earning inequality, and we should pay much attention to this relationship, our country should improve income inequality by formulating the policy of the development of education. We cannot refuse inverted U-shaped curvilinear curves between education and earning inequality in China, in the previous stage, the increase of average attainment of education can deteriorate earning inequality, in the latter stage, the increase of average attainment of education can improve earning inequality. In generally, our country is in the latter stage, but in different provinces, the relationships above possibly have been analyzed respectively; in our country, the increase of average attainment can cause the deterioration of education inequality, while education inequality and income inequality are positively correlated. So education policy should be focused on the realization of education fair, especially the poor areas and the rural areas; considered the analysis of the income inequality, the whole affection of the factors of education to earning inequality in our country is the worsening affection. In making education policy, our government should look at the role of education objectively, use different education policy in the different stages, make the education playing in a positive role in the lower earning inequality.