Educational Inequality and Educational Poverty - The Chinese Case in the Period 1975-2004

Abstract

Together with the economic transition, in China the return to education and the skill premium increased; this phenomenon was deeply demonstrated by a large number of studies identifying it with one of the main cause of the increasing inequalities at national, regional and sector level. For this reason, these studies underlined the relevant role of education in influencing the future evolution of the income distribution.

Our study aims to analyze the evolution of educational inequality and educational poverty over the period 1975-2004 by using traditional inequality indicators, but adapting them to some features of education distribution. In particular, we exploit the Theil index decomposition properties to distinguish between distributive improvements due to changes in basic education diffusion and improvements related to all the educational levels. The analysis is carried out by using the China Health and Nutrition Survey provided by the Carolina Population Center for the period 1989-2004. In spite of its incomplete geographical coverage (only 7 Chinese provinces were considered), this survey allows us to follow the evolution of educational inequality and poverty over 15 years. Moreover, we also use other data sources representative at national level: the Barro-Lee dataset, providing observations from 1975, and the data published in the China Statistical Yearbooks.

The results show that educational inequality indicators constantly decreased not only at national level but also within each province and area. However, the Theil index decomposition shows that the decrease of educational poverty and the reduction of its depth played a relevant role in improving the whole education distribution. On the contrary, with regard to people accessing to education, educational inequality indicators show a modest tendency to increase over the considered period; this reveals that the strongest changes and distributional progress concerned the lowest part of the education distribution, while inequalities among educated people didn't improve.

Keywords: Human Capital, Educational Inequality, Educational Poverty, China

JEL Classification: C43, D63, I21, I32, O15