Research On The Effect Of Education Inequality On Income Inequality

Since the Reform and Opening-up, there is an increasing gap of economic development in regions due to various reasons such as the income disparity and education inequality. This paper is inspired by the present situation of education inequality in Gansu province. This paper investigates the relationship between the education inequality and income disparity according to the statistical data, survey and existing theory. We find that there is a huge gap between urban and rural education development for years and the tendency of general layout of high-quality educational resources is based on “city” and “priority” principles. Even as the positive process of education equality and the high attention in western region education by government,these regulations and policies are mainly focus on the improvement in educational equipment and infrastructure. The disparity in teacher resources is still serious, which is regarded as most important point. Besides, there is an increasing number of students from rural area have migrated to town and village as the result of change of education layout, which leads to the education in town and village becomes the weakest part in our nation. In the situation of concentration of education resources,the inequalities of opportunity and cost in getting high standard education for students from different region or social stratum have made the problem of income disparity becoming more serious in both short and long term that may even lead to the stratum solidification.According to the result of gene coefficient in education and income,the gap is still relatively high between education and income even there is decreasing trend. The regression result also shows that the education inequality is the key factor of income disparity(the income disparity increase by 0.264% as the education inequality go up by 1%). Furthermore, we find that there is a positive correlation between average levels of education and income disparity, which is due to the structural in urban and rural education. Additionally, the increasing proportion of government expenditure on education also leads to the much income disparity that originate from the historical shortage in education expenditure and the “differentiation” education development strategy.Through the organizing and classifying the Chinese education regulation and policy, this paper concludes that under “city” and “priority” principles the educationdifferential is the direct and most important cause of education inequality. Some of the promoting education equality policies are not only useless but also cause the education inequality more serious. Fortunately, the government is approaching the education equality development as the more attention and investment in western and rural area education. At last, this paper proposes some prospect policies that can be used to adjust the current education resources and income inequality situation.