CDEP-CGEG WORKING PAPER NO. 44

Does primary school duration matter?  Evaluating the consequences of a large Chinese policy experiment

Alex Eble and Feng Hu

Abstract:

Every government chooses the number of years of schooling needed to complete primary education, but little is known about how this policy decision affects educational attainment and subsequent labor market outcomes. We study a policy change in China which extended the length of primary school from five years to six but did not change the primary school curriculum. We exploit the gradual rollout of the policy to estimate its impact on affected individuals’ schooling and performance in the labor market. The policy causes average years spent in primary school to increase from 5.2 to nearly six, and post-primary attainment to increase slightly. The policy raises monthly income on average by 2.6% and is progressive, bringing higher income returns (5-8%) for the least educated. We estimate the policy has already reallocated 450 million years of labor from work to schooling and we generate cost-benefit estimates to quantify this tradeoff, highlighting the large public finance implications of this policy decision.

Download Paper as PDF