Research On Finance Cost Index Of Compulsory Education For Jiangsu Based On The Cost Function

Popularization of compulsory education is the cornerstone to achieve educationequity for Jiangsu Province. For a long time, there is huge difference between regions,between urban and rural areas, between schools in Jiangsu Province, which hindersthe balanced development of compulsory education. The obvious educationdifferences among three areas of Jiangsu Province and the absent of education fiscaltransfer payment are the main reasons of issues in the development of compulsoryeducation. In the condition of limited educational resources, to achieve a rationalallocation of educational resources between all levels of education, as well as betweenregions, between urban and rural areas have relationship with Jiangsu development.General transfer payments and special transfer payments are two ways to make up thegovernment investment gap. In order to narrow the financial differences betweenregions and achieve the equalization of public services, we must establish transparentand formulaic transfer payment method. However, the existing transfer paymentmethod neglects cost difference and only takes the difference of wealth and demanddifference among areas into account, it will affect the effect of transfer payments anddo harm to the rational allocation of educational resources. Therefore, themeasurement of cost index for compulsory education has great significance forcompulsory education transferred-payment (CETP), but it is still a difficult problem.So taking Jiangsu Province for example, we use cost function method andhierarchical linear model approach to find possible factors that affect educationexpense, then estimate cost index for counties. At last, we take the cost index to be asimple application in financial transfer payment. This paper draws the followingconclusions:(1) Education expense per student has a significant correlation withfinancial income per student, the number of students, district categorical variables andthe effort degree of educational finance. The relationship is not significant betweeneducation expenses per student and the proportion of rural population, populationdensity.(2) Cost index of south Jiangsu is rising and greater than North Jiangsu, whilecost index of north Jiangsu is dropping.(3) After cost adjustment, the gap betweencounties is decreasing. It is helpful to promote the balanced development ofcompulsory education.(4) After cost adjustment, it saves financial transfer paymentsto compulsory education for Jiangsu. It isn’t conducive for equalitarianism transferpayment to realize fairness and allocate resources reasonable.(5) North and middle Jiangsu have been the objects of transfer payments all the time. And after costadjustment, some counties of south Jiangsu also need financial assistance. We shouldpay attention to this phenomenon. And it is unreasonable to simply allocate educationresources on average.(6) After cost adjustment, whether some counties need financialassistance has changed every year.For the above conclusions, this paper put up with the following measures:(1)Adjust the layout of the school and integrate educational resource appropriately.(2)Clearly identify the subject of CETP and promote "North-South counterpart support"plan.(3) Establish the formulation of transfer payments, and re-calculated the costindex of counties every year.