The Returns To Education And Income Gap In China

Since the 21st century,China's economy has achieved rapid development,but also experienced a serious income inequality.The issue of income inequality in China is mainly manifested in the fact that the income inequality between urban and rural areas,different regions and different groups is still large.China's economic steps into the"new normal"pace,sharp income inequality will directly affect the process of China's socialist modernization.There are many factors that affect the income inequality,and the return to education is one of the key factors.The rate of return to education takes into account the utilization efficiency of educational resources.The difference in the returns to education affects the income distribution between individuals and regions.Estimating the returns to schooling of different income groups,urban and rural areas,the east and Midwest regions and analyzing its impact on the income inequality can provide some policy implications for promoting social equity in China.The returns to education and income inequality have been studied in the existing literature respectively.However,the relationship between them has not been fully tested in applicable cases in China.In order to answer the question,this article first elaborated the theory about how the schooling rate of return affects the income inequality.Second,by using the quantile regression model and adding the dummy variables related to the labor market,after eliminating the impact of labor market segmentation,the change characteristics of educational return rate and its impact on income inequality can be truly revealed.Third,based on the actual situation of education in China,this paper discusses the fundamental reasons why the distribution characteristics of the return on education in China are different from those in developed countries and the impact on the income inequality.Finally,there are obvious urban-rural and regional differences in education investment and economic development in China.Therefore,this paper makes a comparative study of the returns to education,and analyses its impact on the urban-rural and regional income inequality,which is helpful to guide urban-rural and regional investment in education.Through the comparative analysis of the empirical results,the following conclusions are drawn:With the increase of income,the returns to education in China is gradually decreasing,and the returns to education help to narrow the income inequality in China.This phenomenon is related to China's education system,economic system and the distribution of educational resources;labor market segmentation has an important impact on the rate of return on education;the return to education of urban residents is higher than that of rural residents,and the urban-rural effect of the returns to education will increase the urban-rural income inequality;the return to education in the eastern region is higher than that in the midwestern region,and the regional effect of the returns to education will increase regional income inequality.Based on these conclusions,the policy recommendations are:The Chinese Government adheres to the policy of strengthening education,focusing on supporting low-income groups;to deepen the reform of rural education system and promote the development of vocational education;to increase investment in education in the Midwestern regions to narrow the regional development inequality;to add family information to the tax system to promote income flow;to break down barriers to the labor market and give full play to the signaling role of education in the labor market.