Abstract
In this article, it discusses the differences in economic development between urban and rural areas and regions in our country from the perspective of education investment and fixed asset investment. Based on the provincial data of 31 provinces from 1999 to 2017 released by National Bureau of Statistics, it expends the Cobb-Douglas model and Lucas model, and analyses the data with multiple linear regression models. From the study, it finds that compared with investment in fixed assets, investment in education has a larger role in promoting economic development, which is more obvious in the underdeveloped central and western regions and rural areas. However, at the same time it needs to note that the positive effects of education investment will be restricted by the economic structure and policy environment, and education expenditure policies should also be implemented in accordance with time and local conditions.