An Empirical Study On The Effect Of Transfer Payment On The Investment Balance Of Compulsory Education

Since the reform and opening up,China’s education has made significant progress.In the 1980 s,China began to implement nine-year compulsory education,which was basically universal at the end of the century.In the 21 st century,China’s compulsory education has gradually entered a stage of balanced development.Although all school-age children have fundamentally solved the problem of "learning",there are still significant gaps in school running level,financial support and education quality,no matter between regions,between urban and rural areas or between schools.The original intention of China’s transfer payment system is to adjust the financial imbalance between governments in different regions.In particular,the general transfer payment in financial transfer payment is mainly used to subsidize regions with financial gaps,so as to narrow the financial gap between regions and achieve the equalization of basic public services between regions.In recent years,the scale of transfer payments from the central government to local governments has continued to expand.This paper combines transfer payment with compulsory education investment balance,which can not only explore the impact of transfer payment on compulsory education investment,but also enrich relevant literature on the impact of transfer payment on compulsory education investment balance,and also provide more reference for the government to further improve the transfer payment system and compulsory education investment planning.Since the founding of the People’s Republic of China,China’s compulsory education investment system has undergone several evolutions,and finally formed an investment system of "under the leadership of the State Council,the local government is responsible for,hierarchical management,and the county is the main".The central and local governments assume the responsibility for investment mainly through transfer payments.It can be seen that the superior transfer payment plays a very important role in the process of reducing the dependence of local compulsory education investment on the county economy,so as to realize the fiscal neutrality of compulsory education.Transfer payment affects the balance of compulsory education investment mainly through two ways: one is the distribution effect,that is,whether transfer payment can reasonably distribute financial funds in areas with different economic development levels;The second is incentive effect,that is,whether the transfer payment funds allocated by the higher authorities can stimulate local governments to increase their investment in compulsory education.Whether the two approaches can realize the resultant force of policies will directly affect the realization process of balanced investment in compulsory education.Before the empirical test of the transfer payment mechanism,we first understand the current status of compulsory education investment in China through a set of indicators.This paper collects and collates data from 31 provinces and cities from 2010 to 2019,and uses absolute difference,relative difference,range,standard deviation and coefficient of variation to empirically measure the evolution of China’s compulsory education investment in education funds,teachers and hardware facilities.The results show that there is still a large gap between regions in China’s current compulsory education investment,showing a "central depression".On this basis,during the expansion of the sample period,the data of 29 provinces and cities(excluding Xinjiang and Tibet)from 2000 to 2019 were selected to investigate the extent,direction and significance of the distribution effect and incentive effect of superior transfer payment on the balanced investment in compulsory education in two steps.The first step is to analyze the distribution effect of transfer payment by using the benefit destination analysis technology.The analysis technology of benefit fate can be divided into average benefit fate analysis and marginal benefit fate analysis.The analysis of average benefit destination needs to build two benefit indicators,namely,the per capita transfer payment benefit index(TPPI)and the per student transfer payment benefit index(TPSI).The marginal benefit destination analysis calculates the corresponding marginal benefit rate by establishing an equation representing the marginal benefit rate of per capita transfer payment and using seemingly unrelated regression.The results of benefit destination analysis show that the distribution effect of transfer payment has the ability to help the weak.The underdeveloped regions are the main beneficiaries of average destination and marginal destination,while the economically developed regions are the main losers.Transfer payment can narrow the financial gap between regional governments,which is conducive to narrowing the gap in compulsory education investment between regions.The second step is to establish a panel corrected standard error(PCSE)estimation two-way fixed effect model,a generalized least squares(FGLS)estimation two-way fixed effect model and a two-stage least squares(2SLS)model with instrumental variables.The full sample data and the data excluding outliers are used for benchmark regression,respectively.The results show that the transfer payment has a positive incentive effect on the investment in compulsory education.However,the heterogeneity between regions is obvious.The transfer payment has a significant incentive effect on the central and western regions,while the incentive effect on the eastern regions is not significant.The empirical research results of this paper show that the transfer payment investment in compulsory education can narrow the financial gap between regional governments under the distribution effect,and increase the investment of local governments in compulsory education under the incentive effect.The two form a joint force of policy to jointly promote the realization of balanced investment in compulsory education.Considering that the scale of transfer payment has nearly tripled from 3.3 trillion yuan in 2010 to 6.5 trillion yuan in 2019,but the coefficient of variation and other indicators reflect the fact that China’s compulsory education investment is still uneven,indicating that to achieve balanced compulsory education investment,in addition to transfer payment,it is necessary to accelerate the economic development of underdeveloped areas,and the role of transfer payment in the balanced compulsory education investment should be mainly complementary,It is the key to strengthen the self "hematopoietic" ability of underdeveloped regions.Based on the research conclusions of this paper,the existing transfer payment investment should also be adjusted as follows:(1)dynamically adjust the beneficiaries of transfer payment;(2)Optimize the transfer payment system and methods;(3)Change the incentive direction of transfer payment;(4)Clarify the division of duties and financial responsibilities of governments at all levels on education;(5)The focus of compulsory education investment has shifted from hardware to software.