The Effect Of Public Education Expenditure On Intergenerational Income Mobility

In China,with the rapid economic development and the significant improvement of people’s living standards,income inequality has become increasingly severe,and raised much public concern.Many economic studies have shown that opportunity inequality is one of the most important causes for income inequality.As an important measure for the degree of equal opportunity,intergenerational income mobility is a measure of the correlation between the incomes of children and parents in a family.Low intergenerational income mobility means that the income of parents has a great influence on the income of children.Conversely,high intergenerational income mobility reflects that children’s income is mainly determined by their own endowments and acquired efforts.The phenomenon of "second generation" and "fighting fathers" that are common in our society,and the topics of "social class immobility" and "poor intergenerational transfer" frequently seen in the media all reflect the public’s perception and dissatisfaction with the degree of inequality of opportunity in China.It also highlights the urgency and necessity of promoting the intergenerational income mobility in China.In the above context,improving intergenerational income mobility will undoubtedly narrow the income gap,promote equal opportunities and social equity,and also stimulate the vitality and creativity of market themes.Moreover,it will encourage China to leapfrog the middle-income group during the "14th Five-Year Plan" period.A large number of studies have shown that human capital generated by education influences intergenerational income mobility.This thesis incorporates the various layers of public education expenditure into the study of intergenerational income mobility,analyzes the mechanism and empirical results of government investment in education,and put forward countermeasures and suggestions to improve China’s intergenerational income mobility.Specifically,it mainly includes the following two parts.The first part is the theoretical analysis.Chapters 2 and 3 systematically analyze the influence of public education expenditure on intergenerational income mobility based on combing and evaluating the existing literature on the estimation of intergenerational income mobility,the transmission mechanism and the relationship with public education expenditure.It finds that public education expenditure affects intergenerational income mobility by making up for the insufficiency of family human capital investment and raising the level of human capital of the children.This part of the content broadens the research perspective and enriches the theory of intergenerational income mobility.The second part is the empirical analysis.Chapter 4 uses the data from the China Health and Nutrition Survey(CHNS)and the "China Education Expenditure Statistical Yearbook" and an econometric model to analyze the current situation of intergenerational income mobility in China,as well as the overall effect and heterogeneity of the various layers of public education expenditures on intergenerational income mobility.The results show that China’s intergenerational income mobility is not optimistic.The lower limit of intergenerational income elasticity is 0.342,and the upper limit is 0.511.An increase in public education expenditures at all stages of education can effectively promote intergenerational income mobility,and the promotion effect of higher education stage is the most significant.On this basis,the paper uses quantile regression method to test whether there is heterogeneity in the impact,it is found that there is strong heterogeneity in intergenerational income mobility among different income levels and urban and rural groups.As the income of children rises,the intergenerational income correlation shows a downward trend,but there are "head down" and "tail-lifting" phenomena at both ends of the curve.The intergenerational income mobility of urban residents is higher than that of rural residents.Through further analysis of the heterogeneous effect,it can be concluded that in terms of promoting intergenerational income mobility by increasing public education expenditures,low-income groups are sensitive to primary education and secondary education stages,middle-income groups are sensitive to higher education stages,and high-income groups are not sensitive to all stages of education.When it turns to urban-rural differences,increasing investment in all stages of education for urban households can effectively improve intergenerational income mobility,and increasing investment in rural households cannot achieve significant results.However,increasing investment in compulsory education can effectively promote rural intergenerational income mobility in low-income families.