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Fiscal Decentralisation, the Knowledge Economy and School Teachers’ Wages in Urban China

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  • Yi Long
  • Chris Nyland
  • Russell Smyth

Abstract

We examine how fiscal decentralisation and progress towards the development of a knowledge-intensive economy has impacted on teachers’ wages in China, utilising a panel dataset of 31 provincial administrations from 2001 to 2013. We find that fiscal decentralisation has a negative impact on teachers’ wages and this effect is further enhanced by a deepening of the knowledge intensity of the economy, while knowledge economy itself has no significant impact on teachers’ wages. The findings suggest that incentives being offered to local administrators need to be revisited if the national government is convinced of the need to increase teacher quality in ways suited to the knowledge economy China wishes to construct.

Suggested Citation

  • Yi Long & Chris Nyland & Russell Smyth, 2016. "Fiscal Decentralisation, the Knowledge Economy and School Teachers’ Wages in Urban China," Monash Economics Working Papers 13-16, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2016-13
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    References listed on IDEAS

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    More about this item

    Keywords

    fiscal decentralisation; knowledge economy; teachers; wages; human capital; China;
    All these keywords.

    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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