The Impact Of Human Capital On Consumption Inequality

After more than 40 years of rapid development,China’s economic level and people’s living standards have been greatly improved,but at the same time,problems are also emerging.At present,the economic development is not equal and balanced,and the problem of consumption inequality is increasingly prominent.On the study of economic inequality,scholars first studied it from the perspective of income.However,in recent years,the research on consumption inequality has gradually increased,and the benefits of using consumption data for research are gradually known.Therefore,more and more literature has begun to turn to the research on consumption inequality.If a country wants to maintain continuous innovation and development,the continuous accumulation of human capital is indispensable.Human capital is the most important resource for sustainable development.Therefore,human capital is an important part of national construction.Therefore,this paper will analyze the impact of human capital on consumption inequality from the perspective of human capital.This paper consists of six parts.The first part is an introduction,which introduces the background and significance of writing;The second part is mainly about literature review at home and abroad,summarizing and commenting on the existing literature from both domestic and foreign perspectives,and putting forward the theoretical hypothesis of this paper.The third part describes the current situation of China’s consumption inequality and human capital construction by citing relevant data,and analyzes the relationship and transmission mechanism between them from the theoretical level.The fourth part introduces the model setting,data sources,and all relevant variables.The fifth part is the main content of this paper,which mainly conducts empirical analysis.By using CFPS data,we first conduct benchmark regression,and then conduct robustness test to ensure the robustness of benchmark regression results;Secondly,aiming at the endogenous problem in the model,the least square estimation is conducted by selecting the education level of the head mother as the tool variable of this paper to test the results again.Then,further analysis is carried out by selecting the age of the household head,different types of consumption data,different regions and different levels of human capital for further analysis,and the conclusion is expanded and deepened from multiple perspectives.Finally,the impact mechanism test is conducted to explore how human capital affects household consumption inequality.By building a mediation effect model,household savings rate is selected as a mediation variable for mechanism analysis.According to the empirical results of this paper,the following conclusions are drawn:First,the increase of human capital is helpful to alleviate consumption inequality.Based on the empirical results obtained from the OLS model,human capital has a negative impact on household consumption inequality.Every time the education level of the household head increases,the household consumption inequality coefficient decreases by 0.017 units,and the test results are significant at the level of 1%.Robustness test and endogenous test have obtained similar results.Second,the influence of human capital on consumption inequality is different in different regions.The results of sub-sample test show that there are obvious regional differences in the impact of human capital on consumption inequality.For the overall consumption inequality,human capital has a greater impact on the central and western regions than the eastern regions.For the development and enjoyment type consumption inequality,the eastern region has a more obvious effect,while the western region is more sensitive to the survival type consumption inequality.This also shows that compared with the eastern region,the western region has a large gap in both economic development and human capital level.Third,human capital alleviates household consumption inequality by reducing residents’ savings rate.By selecting the savings rate as the intermediary variable,this paper uses the intermediary effect model to test how human capital affects household consumption inequality.According to the empirical test results,it can be concluded that the increase of human capital will alleviate household consumption inequality by reducing household savings rate.On the basis of the above conclusions,this paper puts forward the following suggestions from the aspects of human capital construction and reducing consumption inequality.In terms of human capital construction:First,increase investment in education to reduce the burden on families.The government should increase the investment in education and reduce the burden of human capital investment on families.Second,promote the equalization of education and narrow the gap in human capital.The government should increase the construction of educational infrastructure,narrow the educational gap between different regions,and promote the equalization of educational public services.In terms of alleviating consumption inequality:First,enhance residents’ consumption confidence and improve the existing system.The government should improve the relevant security system and promote the transformation and upgrading of the consumption structure.Second,narrow the income gap and avoid consumption inequality caused by institutional inequality.The government should improve the existing income distribution system and tax system,and try to reduce the consumption inequality caused by system inequality.