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

Bin Huang, Mengmeng Gao, Caiqun Xu, Yu Zhu

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    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.
    Original languageEnglish
    Pages (from-to)45-61
    Number of pages17
    JournalChina Economic Review
    Volume45
    Early online date7 Jun 2017
    DOIs
    Publication statusPublished - Sep 2017

    Keywords

    • Province-Managing-County reform
    • Fiscal decentralization
    • Per pupil educational expenditure
    • Causal effect

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