On The Rate Of Return To Education And The Income Gap Under Educational Expansion

Since the reform and opening up,China’s economy has developed rapidly,and the people’s living standards have greatly improved.Although China has eliminated absolute poverty,the problem of relative poverty still exists.Income gaps between regions,urban and rural areas,and different income groups still exist,which will inevitably hinder China’s economic transformation and upgrading,and thus fall into the "middle income trap." Education affects the income distribution of different income groups,different regions,and urban and rural areas by influencing the formation of human capital.Understanding the educational rate of return of different characteristic groups can provide enlightenment for our country to solve income distribution problems.Although there are a lot of studies on this issue in the existing literature,few of them analyze the differences of educational yield from the perspective of educational expansion.In this regard,this article first based on the Mincer income equation,using total household income as a proxy variable of personal ability to eliminate the problem of missing variables,and control other related variables,so as to reveal the changes in the rate of return to education.Secondly,use dummy variables such as junior high school,high school,high school and above education stages to replace the years of education to measure the educational rate of return at all levels,and discuss the characteristics of the educational rate of return based on the actual situation in China.Then,the quantile regression model is used to study the characteristics of the educational return rate of different income groups.Finally,this article uses substitution variables and removes some samples to test the robustness of the above regression results and finds that the results are robust.Based on the characteristics of the educational rate of return among different characteristic groups,this article discusses the changes in the income gap between different characteristic groups under the background of educational expansion.Through the analysis of empirical results,this paper draws the following conclusions: educational expansion will lead to the expansion of the income gap between urban and rural areas.If the average education level is higher,the effect of educational expansion on the increase of income gap will be more obvious;educational expansion will expand the gap between regions.If the average level of education is high,educational expansion will exacerbate this income gap;educational expansion can narrow the income gap between different income groups.Finally,this article puts forward policy recommendations that will help narrow the income gap: increase education expenditures and improve education policies;deepen the reform of the vocational education system to promote the development of vocational education;improve the industrial structure in the central and western regions,promote industrial upgrading and transformation;improve social security mechanism to promote labor mobility in urban and rural areas;use the Internet and PPP models to promote innovation in education services.