Education Price and Income Inequality
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AbstractThis paper provides a compressive study on the impact of the Two Exemption One Subsidy (TEOS) program, which provides free compulsory education in rural China. We analyze its immediate and cumulative effects on education for eligible and ineligible children, as well as its short-run and long-run effects on labor market outcomes. We construct a difference-in-differences model to exploit the tuition variations before and after the education reform. Using the National Fixed Point Survey data, we first find the TEOS encourages more eligible boys and girls to attend middle schools and withdraw from the labor market. However, we find a negative spillover effect only on ineligible girls who have finished compulsory education and have eligible siblings: they are more likely to drop out of high school and work in the labor market, and the effect concentrates on ineligible sisters from poor families and counties with stronger son preference. Therefore, the TEOS improves the middle school completion rates for both males and females but reduces the high school completion rates for females. In the long run, men exposed to the TEOS have more years of schooling, higher earnings and working days, and a larger chance of labor migration, while no effect is found on women. This suggests that a gender-neutral policy could have an asymmetric effect across men and women due to the negative intra-household spillover effect.
All Author(s) ListNaijia Guo, Shuangxin Wang, Rudai Yang, Junsen Zhang
Name of ConferenceInternational Symposium on Contemporary Labor Economics
Start Date of Conference15/12/2019
End Date of Conference16/12/2019
Place of ConferenceChinese University of Hong Kong
Country/Region of ConferenceChina
Year2019
Month12
LanguagesEnglish-United States

Last updated on 2021-13-01 at 15:51