Education and allocative efficiency: Household income growth during rural reforms in China

This paper studies the contribution of schooling to rural income in China during factor market liberalization between 1986 and 1995. The relaxation of controls permitted farm households to reallocate productive inputs from agriculture to nonagricultural activities. It is hypothesized that education...

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Bibliographic Details
Published in:Journal of development economics 2004-06, Vol.74 (1), p.137-162
Main Author: Yang, Dennis Tao
Format: Article
Language:English
Subjects:
Agriculture
Allocations
Allocative efficiency
Allokation
Bildung
China
Development economics
Development studies
Economic reform
Economics of education
Education
Effizienz
Einkommen
Family income
Farmers
Farming
Household income
Households
Income
Input allocation
Liberalization
Ländlicher Raum
Market liberalization
Rural areas
Rural income
Schools
Studies
Wealth
Wirtschaftsreform
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Summary:This paper studies the contribution of schooling to rural income in China during factor market liberalization between 1986 and 1995. The relaxation of controls permitted farm households to reallocate productive inputs from agriculture to nonagricultural activities. It is hypothesized that education facilitates this adjustment. Panel data from Sichuan province suggest that schooling enhanced the ability of farmers to devote 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, the expansion of nonfarm activities contributed significantly to household income growth.
ISSN:0304-3878
1872-6089
DOI:10.1016/j.jdeveco.2003.12.007