A Panel Analysis on the Impact of Educational Inequality on Income Inequality in China

This study empirically examines the impact of educational inequality on income inequality in China using panel data from 31 provinces between 2001 and 2021, with particular attention to temporal and regional heterogeneity. Theil indices are employed to measure both educational and income inequality, and fixed effects panel regression models are constructed for empirical analysis. The results indicate that, overall, educational inequality has a significant positive effect on income inequality, suggesting that unequal distribution of educational resources contributes to the widening of income gaps. The time-period analysis shows that the effect of educational inequality was significantly positive during 2001-2010, but became statistically insignificant during 2011-2020, implying that education equity policies have played a mitigating role in recent years. Regionally, the impact is more pronounced in central and western China, with the western region showing a significant mitigating effect of educational investment on income inequality.