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Breaking Barriers: Free Education Reform and the Urban–Rural Disparities in China

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  • Chen Zhang
  • Jie Bai
  • Yanjun Li

Abstract

After the consistent implementation of the ‘Two Exemptions and One Subsidy’ reform for over 15 years, the first cohort of individuals who underwent this reform during their entire compulsory education has now transitioned into the adult labour force. This paper investigates the enduring effects of this reform on urban–rural disparities. Our cohort triple differences results reveal that the reform has significantly reduced the disparities in terms of years of education, admission rates to tertiary education institutions, employment rates (including non‐agricultural employment) and personal income levels. By expanding our understanding of subsidised educational policies, we contribute to existing literature and provide important evidence that could help bridge the urban–rural divide in terms of long‐term human capital development.

Suggested Citation

  • Chen Zhang & Jie Bai & Yanjun Li, 2026. "Breaking Barriers: Free Education Reform and the Urban–Rural Disparities in China," Pacific Economic Review, Wiley Blackwell, vol. 31(3), pages 245-266, August.
    • Handle: RePEc:bla:pacecr:v:31:y:2026:i:3:p:245-266
    DOI: 10.1111/1468-0106.70024
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