Research On The Relationship Between China’s Fiscal Education Expenditure And Income Distribution

This paper studies the relationship between the gap of China’s fiscal education expenditure in structure and income distribution. By the theoretical and empirical analysis, the paper discovers increasing financial investment on education can narrow the income gap.According to the Quasi-public goods theory, education expense should mainly be afforded by public finance as it belongs to quasi-public goods. Human capital theory and the theory of fiscal income distributive function is the theoretic base of that education is able to help solve the problem of income distribution. Through specifically investigating the relationship between China’s fiscal expenditure and income distribution from the perspective of education hierarchy, urban and rural area and regions found that education level has a positive impact on people’s income, the higher level of education the higher people’s income. Through horizontal comparison of urban and rural area education expenditure and income, then analysis the trend contract and scatter diagram of the expenditure gap between urban and rural education and income gap between urban and rural income finding that urban residents have more access to the higher quality education, because much more fiscal expenditure on Education is distributed to this area. However, this situation that the gap between urban and rural areas is gradually widening still remains to be improved. The fiscal expenditure on Education has the same problems existed between regions as urban and rural areas that more fiscal expenditure on Education was paid to the east whose economy grows faster.resulting that the gap among east,west and midland is even wider. On the basis of the data collecting on the people’s Republic of China Statistics Bureau’s official website from 1996 to 2011, using the least squares method to do regression analysis of urban and rural residents income ratio, the proportion of fiscal expenditure on education accounts for fiscal spending, GDP index, the level of urbanization concluding that urban-rural income ratio is inversely related to the proportion of fiscal expenditure on education accounts for fiscal spending and GDP index is positively related to the level of urbanization.Therefore, like improving the size of fiscal expenditure on education, coordinating the financial expenditure ratio of different education level, rationally allocating the scale of the fiscal expenditure on education between urban and rural regional and so on are all having effects on improving income distribution.