How to Decentralize Fiscal Input of Compulsory Education in China? An Economic Analysis of Transition from County-based Decentralized System to Unified Management at Provincial Level

Abstract

Based on the provincial panel data,this paper analyzes the effect of the decentralization of education finance on the output of compulsory education.It comes to the following conclusions: firstly,the decentralization of education finance between central and provincial governments has no significant effects on the total output of local compulsory education,but has significantly positive effects on the output of urban compulsory education and negative effects on the output of rural compulsory education;secondly,the decentralization of education finance between provincial governments and governments under provincial level has significantly negative effects on the output of urban and rural compulsory education;thirdly,fiscal input into education has no significant effect on the output of urban compulsory education,but has significantly positive effect on the output of rural compulsory education.It states that China should increase the central fiscal input into rural compulsory education,and the decentralization of education finance at provincial level is conducive to the increase in the output of urban compulsory education.