An Empirical Research On The Impact On Regional Income Disparityof Government Investment In Education

Since the reform and opening up, China’s economy has made remarkable achievements. The average annual growth rate of GDP has increased to9%. At the same time, the income disparity in China has become increasingly prominent. The World Bank data shows that China’s Gini coefficient has risen from0.3in1978to0.47in2005, which is much more than the internationally recognized warning line of0.4. It is necessary for the government to take appropriate means to regulate the income disparity. The main means are tax system, intergovernmental transfer payment system, social security system, the government expenditure on education. Different means have different results. The paper tries to clear government investment in education on the regional income disparity by empirical studies based on the theory of government investment in education and regional income disparity through comparative analysis, descriptive statistics, analysis and econometric model analysis methods.Scholars at China and abroad have do theoretical and empirical research on government investment in education theory and the distribution of income. They measure regional disparities from a new perspective from combing theory auxiliary materials required for this study, while traditional indicators based on the measure of regional income disparity concept of Theil index.Compared with the Gini coefficient, the Theil index can be decomposed into a group and the group of the gap between the different intra-regional and regional income disparity between the measures under the premise of zoning. The paper choose four factors based on the overall size, per capita, the pace of development and industrial structure, selecting the GDP, per capita GDP,the economic growth rate and the proportion of tertiary industry as four quantitative indicators. Then seperate Analytic Hierarchy of area into several different levels, and the2000-2010National and regional government investment in education and household income to calculate Theil index on the basis of the hierarchical division. Using the VAR model, granger causality test, impulse response of the research methods to analysis the empirical analysis of the results above. Through empirical analysis, the paper have the following conclusions:the overall government investment in education has a positive role in promoting China’s regional income disparity narrowing. If the level of economic development of China is decomposed into four regions, some of the regional government investment in education can improve residents’ income distribution levels of inequality. And some regional government investment in education to narrow the regional income disparity is not an obvious role.On the basis of the above analysis, the paper put forward several specific recommendations:Firstly, to expand the scale of government investment in educatioa Secondly, to improve the transfer payment policy, narrowing the regional government investment in education gap. Thirdly, to optimize investment structure, promote balanced development of education. Fourthly, to further improve the income adjustment means. This can improve the current situatin.