Accomplishment Rate of Compulsory Education May Cause Potential Income Variation in Future – Survey from Eastern and Western Rural Areas

摘要

Using panel data of eastern and western China, we study the relationship between accomplishment rate of compulsory education and income growth, finding a long-run effect of education to income in China’s rural areas while it doesn’t come into effect in a short time. There is a long term relationship between compulsory education achieving and income growth of rural peasants, which means it’s of far-reaching importance to receive compulsory education. However, this kind of correlation works differently in the east and west, which may be due to disparate accumulation of education. In the east, most of the laborers are those who accomplish middle school, whose income increase annually. While its counterpart, because of brain-drain, accomplishment rate of compulsory education presents a negative effect on income growth. From the results above, we learn that the efficiency of human capital should be taken into account besides more investment in west China.