The Nexus of Income Gap, Economic Growth and Educational Inequality in China

This paper incorporates distribution-lag model into a system of equations to study the nexus of income inequality, economic growth and education in China. The major findings are: (1) Income inequality has negative effect on economic growth, and economic growth will in turn be helpful to narrow the income gap. Therefore, controlling the income gap is conducive to economic growth and in turn conducive to narrowing the income gap, in this way the goal that equality and growth develop coordinately may be achieved.(2) the income distribution inequality leads to educational inequality, but the lessening of educational inequality has not promoted the narrowing of the gap in income distribution, a virtuous circle between educational equality and income distribution equality, has not formed spontaneously. To make education, economic growth, income distribution into an endogenous nice track, a series of reforms, policies and measures are needed, to solve such kind of problems as unreasonable labor market structure, urban and rural variations in returns to schooling and unreasonable education investment structure.