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Special Economic Zones and Human Capital Investment: 30 Years of Evidence from China

Author

Listed:
  • Fangwen Lu
  • Weizeng Sun
  • Jianfeng Wu

Abstract

By exploiting the large quantity and rich variety of special economic zones (SEZs) in China, this study investigates how such zones affect human capital investment. Results show that SEZs significantly increase the local high school enrollment rate, but the impact varies across zone types: technology-oriented zones encourage education, while export-led zones discourage it. The increased job opportunities and wage premiums inside SEZs for employees with high school education increase high school enrollment, while such opportunities and wages for employees with middle school education decrease enrollment. A very small portion of the impact, if any, can be attributed to increased income.

Suggested Citation

  • Fangwen Lu & Weizeng Sun & Jianfeng Wu, 2023. "Special Economic Zones and Human Capital Investment: 30 Years of Evidence from China," American Economic Journal: Economic Policy, American Economic Association, vol. 15(3), pages 35-64, August.
    • Handle: RePEc:aea:aejpol:v:15:y:2023:i:3:p:35-64
    DOI: 10.1257/pol.20200492
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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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