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The impact of Province-Managing-County fiscal reform on primary education in China

Author

Listed:
  • Huang, Bin
  • Gao, Mengmeng
  • Xu, Caiqun
  • Zhu, Yu

Abstract

Using longitudinal Chinese county-level data from 2005 to 2007, we examine the causal effect of the Province-Managing-County fiscal reform on primary education spending by combining propensity score matching with the difference-in-difference method and allowing for the concurrent County Strengthening and Power Expansion reform. While the fiscal reform significantly increases per pupil expenditure on elementary education, there is little evidence showing that this fiscal reform narrows the urban-rural expenditure gap within counties. This Province-Managing-County reform, on the other hand, aggravates regional educational spending disparity in elementary schools based on the observation that the reform has caused a higher increase of per pupil educational spending in the affluent Eastern Region than the increase in Central and West China.

Suggested Citation

  • Huang, Bin & Gao, Mengmeng & Xu, Caiqun & Zhu, Yu, 2017. "The impact of Province-Managing-County fiscal reform on primary education in China," China Economic Review, Elsevier, vol. 45(C), pages 45-61.
    • Handle: RePEc:eee:chieco:v:45:y:2017:i:c:p:45-61
    DOI: 10.1016/j.chieco.2017.06.001
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    Citations

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    Cited by:

    1. Haibing Huang & Yinliang Xu & Ying Sun & Jianxu Liu, 2023. "Empirical Analysis of China’s Agricultural Total Factor Productivity and the Reform of “County Administrated by Province”: Insights from Agricultural Enterprise Data," Sustainability, MDPI, vol. 15(16), pages 1-21, August.
    2. Bo, Shiyu & Cheng, Chao, 2021. "Political hierarchy and urban primacy: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 49(4), pages 933-946.
    3. Jiakai Zhang & Renjie Zhao, 2022. "The effect of population aging on pension enforcement: Do firms bear the burden?," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1644-1662, October.
    4. Bo, Shiyu & Wu, Yiping & Zhong, Lingna, 2020. "Flattening of government hierarchies and misuse of public funds: Evidence from audit programs in China," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 141-151.
    5. Alfred M Wu, 2019. "The logic of basic education provision and public goods preferences in Chinese fiscal federalism," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-15, December.
    6. Jiaxin Wu & Hongjuan Yang & Tanveer Ahmed, 2023. "An assessment of the policy of poverty alleviation in continuous poverty-stricken areas: evidence from Yunnan Province, China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 9757-9777, September.
    7. Jin, Haizhen, 2023. "Effects of decentralization on firm performance: Evidence from Chinese county-level quasi-experiments," Economic Modelling, Elsevier, vol. 119(C).
    8. Youlang Zhang & Hongshan Yang, 2023. "Bureaucratic politics, innovation compatibility, and the dynamic diffusion of subnational decentralization reforms in China," Review of Policy Research, Policy Studies Organization, vol. 40(4), pages 553-572, July.
    9. Cai, Guowei & Zhang, Xuejiao & Yang, Hao, 2022. "Fiscal stress and the formation of zombie firms: Evidence from China," China Economic Review, Elsevier, vol. 71(C).
    10. Yue Dong & Dipanwita Sarkar & Jayanta Sarkar, 2021. "Decentralization and health resource allocation: Quasi-experimental evidence from China," QuBE Working Papers 060, QUT Business School.
    11. Jiang, Weijie & Li, Yidong, 2023. "Effect of fiscal decentralization on pollution reduction: Firm-level evidence from China," Economic Modelling, Elsevier, vol. 129(C).
    12. Jia, Junxue & Ding, Siying & Liu, Yongzheng, 2020. "Decentralization, incentives, and local tax enforcement," Journal of Urban Economics, Elsevier, vol. 115(C).

    More about this item

    Keywords

    Province-Managing-County reform; Fiscal decentralization; Per pupil educational expenditure; Causal effect;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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