Working Paper: NBER ID: w18100
Authors: James J. Heckman; Junjian Yi
Abstract: China's rapid growth was fueled by substantial physical capital investments applied to a large stock of medium skilled labor acquired before economic reforms began. As development proceeded, the demand for high skilled labor has grown, and, in the past decade, China has made substantial investments in producing it. The egalitarian access to medium skilled education characteristic of the pre-reform era has given rise to substantial inequality in access to higher levels of education. China's growth will be fostered by expanding access to all levels of education, reducing impediments to labor mobility, and expanding the private sector.
Keywords: No keywords provided
JEL Codes: I25; J24; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| substantial investments in physical capital and existing stock of medium-skill labor (J24) | China's economic growth since 1979 (O57) |
| government's radical expansion of higher education in 1999 (I23) | growing demand for high-skill labor (J24) |
| hukou system (R28) | barriers to education and mobility (I24) |
| reliance on family resources for education financing (I22) | persistent intergenerational poverty (I32) |
| expanding access to education and reducing barriers to labor mobility (J68) | fostering economic growth and reducing inequality (O29) |
| hukou system (R28) | distorts investment incentives in human capital (H31) |