Educational inequality and income inequality: An empirical study on China

Abstract

Based on the endogenous growth theory, this paper uses the Gini coefficient to measure educational inequality and studies the empirical relationship between educational inequality and income inequality through a simultaneous equation model. The results show that: (1) Income inequality leads to educational inequality while the reduction of educational equality does not contribute to the decrease of income inequality, and there is no simple casual effect between them. However education expansion is beneficial to reduce educational inequality and income inequality. (2) Education relates to income inequality through the human capital transmission mechanism, but this mechanism does not automatically translate into a virtuous cycle of “educational equality←→income equality”. (3) In the long run, the reduction of educational inequality does not reduce income inequality, but income inequality has a negative instant-impact on educational equality. (4) At present, the level of educational investment and urbanization do not effectively promote educational equality. In addition, the robustness of the model used in this paper has been partly proved.

Keywords

educational inequality / income inequality / empirical study