Economic Growth,Educational Expansion and Income Distribution:Verification of Two Hypotheses of Inverted-U

The reform and opening-up policy has facilitated rapid nation-wide economic growth and educational expansion. However, the residents’ income gap has widened up along the years. It would be much better to make the income distribution policy if the relationship between economic growth, educational expansion and income distribution, and the law of the residents’ income distribution change are taken into account. The present paper, accordingly, makes an empirical analysis, and the discussion shows that there is an inverted U relationship between economic growth and income distribution. That is, the income gap in China has been widening up in an overall scale; but there have been some decreasing trends since 2002. Nevertheless, the inverted U relationship between the educational expansion and income distribution has not been fully verified. The fact that the correlation coefficient in between is comparatively high could explain the hypotheses of the two inverted U. Presently, the average years of schooling attainment have nearly approached the peak of the inverted U curve, so the Government should continue paying attention to people’s living condition. In order to narrow the income gap, it is an efficient public policy to give priority to education.