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Education and Allocative Efficiency: Household Income Growth during Rural Reforms in China

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  • Yang, Dennis Tao

Abstract

This paper studies the contribution of schooling to rural income growth during a period of factor market liberalization in China between 1986-1995. The relaxation of controls on labor mobility permitted farm households to reallocate productive inputs from agriculture to nonagricultural activities. It is hypothesized that education facilitates this adjustment. Panel data from the Sichuan province suggest that schooling enhanced the ability of farmers to devote more labor and capital to nonfarm production, given the evidence that less than optimum levels of these inputs were allocated to nonagricultural uses. During the transition period, the expansion of rural industries accounted for 42 percent of total income growth.

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Bibliographic Info

Paper provided by Duke University, Department of Economics in its series Working Papers with number 00-17.

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Date of creation: 2000
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Handle: RePEc:duk:dukeec:00-17

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  1. Putterman, Louis, 1993. "Continuity and Change in China's Rural Development: Collective and Reform Eras in Perspective," OUP Catalogue, Oxford University Press, number 9780195078725.
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  3. Orazem, Peter & Vodopivec, Milan, 1995. "Winners and Losers in Transition: Returns to Education, Experience, and Gender in Slovenia," Staff General Research Papers 5270, Iowa State University, Department of Economics.
  4. Mark Rosenzweig & Andrew D. Foster, . "Technical Change and Human Capital Returns and Investments: Evidence from the Green Revolution," Home Pages _065, University of Pennsylvania.
  5. Yang, Dennis Tao & An, Mark Yuying, 2002. "Human capital, entrepreneurship, and farm household earnings," Journal of Development Economics, Elsevier, vol. 68(1), pages 65-88, June.
  6. Yao, Yang, 1999. "Rural industry and labor market integration in eastern China," Journal of Development Economics, Elsevier, vol. 59(2), pages 463-496, August.
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  8. J. Edward Taylor & Antonio Yunez-Naude, 2000. "The Returns from Schooling in a Diversified Rural Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 287-297.
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  15. Huang, Jikun & Rozelle, Scott, 1996. "Technological change: Rediscovering the engine of productivity growth in China's rural economy," Journal of Development Economics, Elsevier, vol. 49(2), pages 337-369, May.
  16. Basu, Kaushik & Narayan, Ambar & Ravallion, Martin, 2001. "Is literacy shared within households? Theory and evidence for Bangladesh," Labour Economics, Elsevier, vol. 8(6), pages 649-665, December.
  17. D. Gale Johnson, 2000. "Agricultural Adjustment in China: Problems and Prospects," Population and Development Review, The Population Council, Inc., vol. 26(2), pages 319-334.
  18. Schultz, T. Paul, 1988. "Education investments and returns," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 13, pages 543-630 Elsevier.
  19. Li, Tianyou & Zhang, Junsen, 1998. "Returns to education under collective and household farming in China," Journal of Development Economics, Elsevier, vol. 56(2), pages 307-335, August.
  20. Yang, Dennis T., 1995. "Education in Production: Measuring Labor Quality and Management," Working Papers 95-56, Duke University, Department of Economics.
  21. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
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