Structural change through public education expenditure evidence from China Xun Zhang
By: Zhang, Xun
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Material type: 
ArticlePublisher: 2019Subject(s): GASTOS EN EDUCACION | DESARROLLO RURAL | DESARROLLO INDUSTRIAL | CHINA | MODELOS ECONOMETRICOS
In:
Contemporary Economic Policy v. 37, n. 2, April 2019, p. 366-388Summary: Under China's hukou system, I analyze the relationship between public education expenditure and structural change as measured by labor transfer from the agricultural to the industrial sector. I construct a two‐sector general equilibrium model, which shows that in the short term, public education expenditure crowds out industrial capital accumulation and temporarily hinders structural change, but in the long term, public education expenditure permanently reduces rural residents' education costs. An inverted U‐shape relationship implied by the empirical evidence indicates that China's current public education expenditure is far from optimal, suggesting that China should increase it, especially for rural residents.
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| OP 1634/2019/2 Contemporary Economic Policy | OP 1634/2019/2-1 Do tax cuts encourage rent seeking by top corporate executives ? | OP 1634/2019/2-2 How do minimum wage adjustments affect wages in China | OP 1634/2019/2-3 Structural change through public education expenditure | OP 1634/2019/3 Contemporary Economic Policy | OP 1634/2019/3-1 Who pays no tax ? | OP 1634/2019/4 Contemporary Economic Policy |
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Resumen.
Bibliografía.
Under China's hukou system, I analyze the relationship between public education expenditure and structural change as measured by labor transfer from the agricultural to the industrial sector. I construct a two‐sector general equilibrium model, which shows that in the short term, public education expenditure crowds out industrial capital accumulation and temporarily hinders structural change, but in the long term, public education expenditure permanently reduces rural residents' education costs. An inverted U‐shape relationship implied by the empirical evidence indicates that China's current public education expenditure is far from optimal, suggesting that China should increase it, especially for rural residents.
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