Income inequality and shadow education in China: From the perspective of social stratification

Abstract

Using data from the China Institute for Educational Finance Research-Household Survey and China Household Finance Survey in 2015 and 2017, we examine the relationship between income inequality and expenditures on shadow education. Our results suggest that greater income inequality constrains shadow education expenditure. However, this effect is only significant among the lower social class. Mechanism analysis reveals that income inequality may influence shadow education expenditure through educational expectations, perceptions of fair opportunities, credit constraints, and social networks. Our conclusion reveals increased inequality in access to shadow education stemming from income inequality. The government should thus optimize policies for the distribution of secondary and tertiary education to reduce income inequality and encourage low-income families to value their children's education. This conclusion would help bridge the gap in access to education resources and outcomes among students with different income levels.