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Research on Educational Expansion and Income Distribution of China

Author: SunBaiCai
Tutor: LaiDeSheng
School: Beijing Normal University
Course: Educational Economy and Management
Keywords: educational expansion educational distribution rate of return to education income distribution average years of school attainment Gini coefficient of school attainment
CLC: G521
Type: PhD thesis
Year: 2005
Downloads: 1117
Quote: 8
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Abstract


Educational expansion and income distribution gap are two kind of social phenomena in the process of economic transition and development in China. This dissertation made an analysis of the influence of educational expansion on income distribution by the use of Chinese empirical data, and two medi-variables have been discussed concerning the mechanism of this influence: educational distribution and rate of return to education. This research has found that the relationship between educational expansion and income distribution of China is of inverted-U type, i.e., educational expansion will widen income inequality in early days, but when the education attainment reaches some level, educational expansion will reduce income inequality.The relationship of inverted-U between educational expansion and income distribution can be explained through two aspects. On the one hand, educational expansion reduces inequality of educational distribution. With Gini coefficient of school attainment as dependent variable, and average years of school attainment as independent variable, this dissertation run regression of regional panel data of 1996~2003, and three methods have been used in the estimation of this system: pooled OLS, random effect, fixed effect, and the results are consistent. The estimate coefficient of average years of school attainment is significantly negative, which shows that currently educational expansion makes educational distribution more equal.On the other hand, on the basis of the foregoing literature we find that the private rate of return to education of China tends to be ascending, which represents the expansion of wage gap of workers who have different education attainment level. From the perspective of labor demand, this dissertation deals with the reasons of the enhancement of rate of return to education in line with the following path:“three-grade fund structure of education——technology change——labor demand to different education attainment level——wage gap”. The dissertation made an emphasis that the three-grade fund structure of education of China makes enterprises select skill-biased technology change, which increases labor demand to skilled worker, and makes the wage gap between skilled worker and unskilled worker widen. So the rate of return to education is increasing.The relationship of inverted-U between educational expansion and income distribution is the sum of equality of educational distribution and enhancement of private rate of return to education. The influence of equality of educational distribution on equality of income distribution is positive, but the influence of enhancement of rate of return to education to equality of income distribution is negative. The net impact of the two influences offers an explanation to the non-linearity type between educational expansion and income distribution.In addition this dissertation also made an analysis of the income gap among regions and between city and country. The average years of school attainment of Chinese resident is increasing, but educational development is different among regions and between city and country. From the view of regions, the educational development level of east is higher than Midwest. Furthermore, there also exist the differences in the inequality of educational distribution among regions, which ranks from high to low as follows: west, midst, east. From the view of city and country, the educational gap outstandingly displays the gap of school attainment. The dissertation runs OLS regression, respectively with reservation rate of primary school or junior high school as independent variable, and with log of GDP per capita as dependent variable. Last but not least, the dissertation constructs index of educational gap between city and country, and run OLS regression too, which shows that educational gap can explain income gap among regions and between city and country in China.

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CLC: > Culture, science,education, sports > Education > China's education > Educational reform and development
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