Unequal school enrollment rights, rent yields gap, and increased inequality: The case of Shanghai

Muyang Zhang and Jie Chen

China Economic Review, 2018, vol. 49, issue C, 229-240

Abstract: This paper first builds a simple theoretic model to explore how a special feature of enrollment policy of public primary schools in urban China, the unequal enrollment right between home owners and tenants, would produce rent-yields gap between different housings. The model also predicts that an enrollment policy featuring with tenant discrimination, accompanying with strict credit constraint, would reduce the chance of kids from middle-income families to attend better public schools while allow families with high initial wealth to access better high-quality public education at a lower cost. Using a hedonic pricing model, we find that, in Shanghai, rental yields of housings in neighborhoods associated with reputed public primary schools is on average 0.1–0.35 percentage-point lower than those associated with ordinary ones. We also explore how the rent-yields-gap varies across housing types, locations and changes over time. Nonetheless, our simulation computation suggests that the estimated opportunity cost of holding such schools in Shanghai is generally not a big amount and affordable for many families. Overall, the high entry costs of owing a housing is the major obstacle to access high-quality public primary education in urban China. These findings highlight how an education policy with features of inequality may contribute to education and residential segregation, and then reduce intergenerational mobility.

Keywords: School quality; Tenant discrimination; Rental yield; Credit constraint (search for similar items in EconPapers)
JEL-codes: H44 I24 R38 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1043951X17300603
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:49:y:2018:i:c:p:229-240

DOI: 10.1016/j.chieco.2017.04.007

Access Statistics for this article

China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

More articles in China Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().