Education Opportunities for Rural Areas: Evidence from China's Higher Education Expansion

TL;DR

This study examines the effects of China's 1999 higher education expansion on rural areas, revealing increased college attendance, a rural-urban migration 'brain drain', and contrasting impacts on village income and household welfare.

Contribution

It provides causal evidence on how education expansion influences rural development, migration, and household income, highlighting contrasting effects at village and household levels.

Findings

Higher education expansion increased rural college attendance.

Villages experienced income decline and worse living conditions.

Households with migrants saw income gains.

Abstract

This paper explores the causal impact of education opportunities on rural areas by exploiting the higher education expansion (HEE) in China in 1999. By utilizing the detailed census data, the cohort-based difference-in-differences design indicates that the HEE increased college attendance and encouraged more people to attend senior high schools and that the effect is more significant in rural areas. Then we apply a similar approach to a novel panel data set of rural villages and households to examine the effect of education opportunities on rural areas. We find contrasting impacts on income and life quality between villages and households. Villages in provinces with higher HEE magnitudes underwent a drop in the average income and worse living facilities. On the contrary, households sending out migrants after the HEE experienced an increase in their per capita income. The phenomenon where villages experienced a ``brain drain'' and households with migrants gained after the HEE is explained by the fact that education could serve as a way to overcome the barrier of rural-urban migration. Our findings highlight the opposed impacts of education opportunities on rural development and household welfare in rural areas.