| ID | 192393 |
| Title Proper | Income inequality and educational expenditures on children |
| Other Title Information | evidence from the China Family Panel Studies |
| Language | ENG |
| Author | Chen, Yuanyuan ; Yuan, Meng ; Zhang, Min |
| Summary / Abstract (Note) | Using the data from the China Family Panel Studies from 2010 to 2018, we find that rising income inequality causes parents to spend more on children’s education, both in school and out of school. The impact of income inequality on out-of-school expenditures is significant at intensive and extensive margins, especially for study-related tutoring participation. Furthermore, we find some empirical evidence suggesting that in response to rising inequality, mothers spend more time on children’s education and there exists a substitution effect between time and money. Further analysis suggests two potential reasons for the rising education spending: (1) a higher income inequality resulting from rising skill premium strengthens parents’ long-lasting cultural attitude towards education to higher levels, inducing them to spend more on educational investment, and (2) a higher income inequality increases the value of higher education, leading to a stronger demand for better educational opportunities, and then, more intense education competition, forcing parents to invest more in education. |
| `In' analytical Note | China Economic Review Vol. 78, Apr 2023: p.101932 |
| Journal Source | China Economic Review 2023-04 78 |
| Key Words | China Family Panel Studies ; Income inequality and educational expenditures on children |