Does import trade liberalization affect youth human capital accumulation: Evidence from prefecture-level cities in China

Based on the 2005 One-percent National Population Sample Survey data and 2010 China Family Panel Studies data, taking China's accession to the WTO as an exogenous policy shock, this paper constructs a difference-in-differences regression model and adopts urban tariff-cutting indicators to measure the degree of import trade liberalization, and investigates the impact of import trade liberalization on the accumulation of youth human capital. The study finds that import trade liberalization significantly increases the probability of young individuals receiving senior high school education, mainly manifested in increased probability of low-trade-opening cities, females, and only child receiving senior high school education. The findings also show that import trade liberalization improves young individuals' cognitive ability and labor market performance, as evidenced by the higher word test scores and income satisfaction. Meanwhile, import trade liberalization discourages young individuals from believing that they can change their personal future development through their own talents and social relations, instead of putting more emphasis on the enhancement of their personal ability. This paper shows that the impact of import trade liberalization on youth human capital is multidimensional, affecting not only the cognitive abilities but also the non-cognitive abilities of young individuals.