More Access, More Competition: Unintended Consequences of Public Education Expansion in China

Shenglong Liu, Yuanyuan Wan, Shengxiang Xie and Xiaoming Zhang

Working Papers from University of Toronto, Department of Economics

Abstract: Although education fever is widespread across East Asia, the role of public education investment in intensifying this fever remains underexamined. By leveraging the staggered rollout of county-level free senior high school education pilots in China, we find that this major expansion of public education increased the number of registrations at private tutoring centers by about 20% and doubled household spending on tutoring. Using administrative night-light data and elite university admission records, we show that the effect is driven by more intensive competition for scarce top-tier college placements rather than by declining public school quality. The response is strongest in regions with greater income inequality and lower elite university admission rates, but substantially weaker in areas with better outside options, such as higher local employment rates. Our findings suggest that expanding access to senior high school alone may exacerbate educational arms races, underscoring the need for complementary policies that reduce income disparities and broaden postsecondary opportunities.

Keywords: Education Competition; Public Education Investment; Crowd-in Effect (search for similar items in EconPapers)
JEL-codes: H41 I22 I28 O15 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2025-12-22
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