Education's role in China's structural transformation

Soohyung Lee and Benjamin Malin

No 2009-41, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We explore education's role in improving the allocation of labor between China's agricultural and nonagricultural sectors and measure the portion of China's recent growth attributable to this channel. Building from micro-level estimates, we find that education's impact on labor reallocation between sectors accounts for about 9 percent of Chinese growth, whereas its impact on within-sector human capital growth explains only 2 percent. Our findings suggest that, when frictions cause large productivity gaps across sectors and returns to education are greater in higher-productivity sectors, education policy may be a useful tool for increasing efficiency.

Keywords: Education; -; Economic; aspects (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-cna, nep-dev, nep-edu, nep-hrm, nep-lab and nep-tra
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Journal Article: Education's role in China's structural transformation (2013)
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