Does the Fiscal Education Policy Alleviate Long-Term Poverty? Based on the Perspective of Poverty Vulnerability

Abstract

The current poverty cannot fully reflect the causes and consequences of its disadvantages due to the long duration of poverty, so it is necessary to examine long-term poverty and persistent poverty from the perspective of vulnerability. In this paper, it constructs a two-stage overlapping model with family and financial investment in education, using the three-stage least squares method to measure the poverty vulnerability of children and fathers from the perspective of vulnerability. At the same time, it matches the individual data from 1991 to 2015 in CHNS with the average education expenditure data of the financial expenditure on education. Through empirical evaluation of Beta regression, it evaluates the influence of the fiscal education policy on intergenerational transmission of poverty. Moreover, it discusses whether the fiscal education policy, which aims at making up for the inefficiency of investment in family education, mitigates the long-term poverty effect and the degree of alleviation. It is found that: the poverty vulnerability of the offspring and the father shows a downward trend from 1991 to 2015; there is a great correlation between the poverty vulnerability of the offspring and the father; the variables such as gender, work status, marital status and so on in the offspring will affect poverty and vulnerability; poverty vulnerability has strong urban and rural, regional heterogeneity; poverty vulnerability has the characteristics of intergenerational transmission; the increase in the fiscal expenditure on education can significantly reduce children’s vulnerability to poverty, and has a strong long-term impact on reducing the incidence of poverty in future generations, and the poverty reduction effect has a stronger impact on the lower level of education of the parents, which means that the fiscal education policy can break the intergenerational transmission of poverty; the effect of the fiscal expenditure on education in the primary school on the intergenerational transmission of poverty is more obvious when comparing with the junior high school stage; there are significant differences in the intergenerational transmission of poverty vulnerability under different levels of the fiscal expenditure, in which the intergenerational mobility is lower in areas with lower levels of the fiscal expenditure on education. It is further proved that the fiscal education policy can reduce the dependence of the offspring on the investment of education by the father and reduce the intergenerational transmission of poverty by using quantile regression and threshold regression as the robust analysis. As a result, the allocation of the fiscal education policy should be more biased towards poor areas, which should also provide more support for low-income, low-education groups. The findings of this paper are helpful to solve the target problem of anti-poverty of the fiscal policy, and provide empirical support for the discussion of alleviating long-term poverty by the fiscal policy.