The Relationship Between Receipts Disparity And Education Disparity Of City And Countryside In Transition Period Of China

There are two obvious economic phenomena in past twenty years in China, fast economic growth and increasing disparity in income. At the same time, economists find the phenomena that income disparity of city and countryside is more and more salience. This articles study the relationship between income disparity and education disparity of city and countryside by using of serial time data from 1978 to 2005. I find that continuously ampliative education disparity has obvious effect on income disparity and income disparity can also affect the education disparity of city and countryside. They have causal relationship and the division of education market maintains and enlarges the disparity. Hereinbefore, we can consider that education disparity of city and countryside is an important factor to current income disparity and the influence could keep on through the current generation to the later generations. It is precisely because the gap between education and income in city and countryside that could easily caught in a vicious cycle of inter-generational, so the government should consider the important role of the education opportunities for reducing income inequality gap when they consider the equity objectives to promote social stabilityUnder the existing dual economic system in our country, the educational finance system's reform-separation of powers which would aggravate the imbalance in educational investment between urban and rural areas after the reform of the tax system. This system leads to inequality in the development of education opportunities between urban and rural areas. Of this, the central and provincial governments should substantially increase financial funding for education and gradually improve compulsory education in rural areas for the protection mechanisms, expressly, the investment in education should be resolutely implemented preferential policies to the rural areas and establish a corresponding strong financial security and monitoring mechanism and eventually narrow the gap between urban and rural incomes.