A Study On Dynamic Effects Of Educational Inequality To Widening Income Disparity Between Urban And Rural Residents

The2013national NPC and CPPCC report stated, the present situation of ourcountry has encountered greatest success with social productive forces strengthenedsignificantly, with people’s living standards increased remarkably and withinternational influence raised dramatically. It is encouraging that we made suchachievements. However, every coin has two sides, we must reconsider the ‘sideeffects’ in the course of country’s development, especially the income disparitybetween urban and rural residents.There are many causes which induce the income disparity between urban andrural residents. Based on various kinds of explanations, it is found that individualincome is largely decides by the individual human capital. Education is the main formof human capital investment. In the event of educational inequality, we must focus onthe urban and rural residents. Therefore this essay is a study on dynamic effects ofeducational inequality to widening income disparity between urban and rural residentsand we found that the two are positively related.From the very beginning, we introduce the research background and significance,and we describe the research content. Secondly, through the way of theories oneducational inequality and income distribution, we made massive analysis fromdifferent perspectives on grounds of expanding income disparities and educationalinequality, especially between urban/rural areas. Furthermore, we elaborate on howand which path education affects the income disparity. Thirdly, in the light ofscholars’ previous experience, we made literature review on the topic. Fourthly,mainly through the official statistics such as ‘Chinese statistical yearbook’,‘Population and employment statistics yearbook of China’ etc., we reference andcalculate with all graphs and charts. Afterwards, we analyze the general situation ofcountry’s education, educational inequality and income disparity. Conclusions hasbeen made that educational inequality between urban and rural residents will causethe expansion of the income disparities. Then, we made empirical analysis on the basis of7years of2005-2011provincial panel data, proving that the inequality ofeducation is the main cause of imbalance of labor quality between urban and ruralresidents. Through which it influence labor productivity, eventually influence theincome gap. In the end, according to the theoretical analysis and the empirical resultsabove, considering the redistribution methods such as taxation, it is essential thatcontrolling the expansion of income disparity through means of education. Meanwhile,we put forward the corresponding policy recommendation. All the means are tonarrow the income disparity through ways of educational inequality between urbanand rural residents.