Balancing Economic and Social Outcomes: Autonomy, Decentralization and Preferential Policies in Urban China

This chapter examines whether cities that were granted preferential policies and autonomy in China gained a competitive and comparative advantage over other urban areas with regard to educational attainment and education inequality. Special Economic Zones (SEZs) and Open Cities (OCs) were able to carry out economic, social and educational reforms before other regions in China. Using the China Household Income Project Surveys from 1988 to 2013, subgroup decompositions of educational attainment and inequality reveal that cities with preferential policies achieved higher average educational attainment levels while reducing education inequality at a larger rate than cities without preferential policies. These results are consistent across regions and socioeconomic stratifications including gender, hukou, age and income. Additionally, a regression-based decomposition of inequality reveals that contributions of region and gender to overall education inequality have diminished while those of hukou and income have increased. The results suggest early adoption of educational reforms has given an advantage to cities with preferential policies in terms of increased educational attainment and the reduction of education inequality. Moreover, "Transition Cities," awarded preferential policies at a much later period, were also able to achieve higher educational attainment and reduce education inequality at higher rates than cities without preferential policies.