Can education expansion reduce income inequality?
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| Title | Can education expansion reduce income inequality?
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| Author | Yang Juan,Lai Desheng and Qiu Muyuan |
| Organization | Beijing Normal University;Peking University |
| Email | yangjuan@bnu.edu.cn；lai@bnu.edu.cn；qiumuyuan@pku.edu.cn |
| Key Words | education investment, income inequality, intergenerational mobility, education expenditure |
| Abstract | The paper analyzes the impact of innate ability, compulsory education and non-compulsory education on income inequality and intergenerational mobility through constructing a four-period overlapping generation model. We found non-compulsory education plays an important role in explaining the income inequality and intergenerational mobility, besides innate ability. The differences between innate ability among different income groups are not very large, but the gap was enlarged by receiving compulsory and non-compulsory education. The reason is poor family invest little on children’s early education and therefore the quality of school is lower. These results the attendance of higher education for children from poor families is much less than the children from other income groups. Through policy experiments on three kinds of public educational expenditure investment models, we find increasing public expenditure in compulsory education period (Grade 1-9) is most efficient and effective one, which can compromise the budget constraints of poor families on children’s early education investment. |
| Serial Number | WP765 |
| Time | 2014-11-25 |
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