Abstract:

Whether the sustained increase in the proportion of public education expenditure can significantly promote the common prosperity within the region, or rely on the spatial spillover effects of neighboring regions, is a key issue related to the effects of education fiscal policy. Using China’s provincial panel data from 2011 to 2020, this paper constructs spatial Durbin models that combine static and dynamic, and examines the spatial spillover effects of public education expenditure on the common prosperity. The study found that the increase in the proportion of public education expenditure has a direct and significant effect on promoting local common prosperity. However, the spatial spillover effect on adjacent areas is not significant, and the short-term effects are stronger than the long-term effects. The marginal effect shows that every 1% increase in public education expenditure will boost the common prosperity index of local residents by 0.203. Every 1% increase in the proportion of public education expenditure in neighboring regions will bring a spillover effect of 0.049 to the region’s common prosperity. The heterogeneity test shows that the spatial spillover effect of public education expenditure on common prosperity in the eastern region is the largest, followed by the western region, and the central region is relatively weak. The policy implication derived from the above findings is to consolidate and improve the guarantee mechanism for local fiscal education funding. In terms of policy, it is necessary to break the barriers to the flow of high-quality resources between regions, promote the balance and integration of education development within the region, and then promote the new pattern of development of the joint construction and sharing of high-quality educational resources.

Key words: common prosperity, public education expenditure, spatial spillover effects, spatial Durbin model