The Study Of The Effect Of Chinese Education Expenditure On Urban-rural Income Gap

Fairness in education has become the focus of widespread concern in the community. Through the educational equity, promoting social equity has become the important means of government policy. From elementary education to higher education is a continuous process of accumulation, not only the number of the public education finance input will affect the social justice, but also the allocation of public education finance at all levels, primary school, secondary school and higher education will also affect the social justice. Especially, in the early developmental stage, larger number of financial investment in basic education will produce the redistribution effect from the rich to the poor. On the contrary, larger number of financial investment in higher education will produce the redistribution effect from the poor to the rich, which will widen income gap. The existing research is that the unbalanced finance input between the urban and rural areas widens the urban-rural income gap. Few studies from the point, whether the allocation of finance at all levels is reasonable, study the fairness of educational finance.According to the Hierarchical Nature of Education System and the Theory of New Structure Economics, using panel data of 29 provinces in China from 1995-2011 and fixed effect model and FGLS, the study finds that the unreasonable allocation of education expenditure among different hierarchies of education system more easily expand the urban-rural income gap than urban-biased education expenditure. So, in the future, on the one hand, we should add the education expenditure of rural areas to balance the education development between urban and rural areas, on the other hand, we should pay more attention to optimize the allocation of education expenditure among different hierarchies of education system, specifically in east enhancing the tertiary education spending, in the inland enhancing vocational education spending, to form the perfect education system of adapting the development of regions, which is an effective way of narrowing the urban-rural income gap.