Foreign Direct Investment and Gender Education Gap

Rufei Guo, Haiji Lin, Xin Wang and Chaoqun Zhan

Economic Development and Cultural Change, 2026, vol. 75, issue 1, 95 - 132

Abstract: The gender education gap has been narrowing worldwide in recent decades. In this study, we present the first causal evidence of how foreign direct investment (FDI) affects the gender education gap. By exploiting the quasi-exogenous deregulation of FDI entry in China upon its World Trade Organization accession, we find that prefectures that experienced greater FDI deregulation tend to have a lower gender education gap for the exposed cohorts. This finding is robust to various identification challenges. We identify two key mechanisms: a job-opportunity channel, where female-skill-intensive FDI shifts labor demand toward skilled females, incentivizing female educational investment; and a culture-spillover channel, whereby FDI diffuses gender-equal social norms, reducing son preference and promoting gender equality in education. In addition, FDI deregulation also has a persistent effect on gender equality by empowering women’s careers.

Date: 2026
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