School Restrictions, Migration, and Peer Effects: A Spatial Equilibrium Analysis of Children's Human Capital in China

52 Pages Posted: 9 Oct 2020 Last revised: 30 Nov 2023

See all articles by Zibin Huang

Zibin Huang

Shanghai University of Finance and Economics - College of Business

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics

Date Written: September 5, 2022

Abstract

In China, policy restrictions hinder domestic migrant children from attending local public schools, compelling migrant children to enroll in subpar migrant schools and inducing parents to leave children behind in hometowns. Despite potential enhancements in educational quality for migrants, local parents and governments have resisted the relaxation of this enrollment restriction due to financial costs and fears of negative spillovers on local children, complicating the determination of the overall welfare effects. In this study, we investigate relaxing this policy in two steps. First, we identify the peer effects from migrant and left-behind children on their classmates and find that the negative spillovers from left-behind children are large but those from migrant children are modest. Second, we construct a spatial equilibrium model accounting for these peer effects and find that this policy relaxation can foster migration, elevate educational equality, and augment national human capital. Children of families from small cities benefit, but those from families in big cities lose due to short-run negative peer effects. The gains of parents and children are much larger than the financial cost. This is the first study to construct a unified framework to analyze the globally discussed migrant and left-behind children issue.

Keywords: Peer effect, Migrant children, Left-behind children, Migration restrictions, Spatial equilibrium

JEL Classification: I21, J61, R23

Suggested Citation

Huang, Zibin and Zhang, Junsen, School Restrictions, Migration, and Peer Effects: A Spatial Equilibrium Analysis of Children's Human Capital in China (September 5, 2022). Available at SSRN: https://ssrn.com/abstract=3678300 or http://dx.doi.org/10.2139/ssrn.3678300

Zibin Huang (Contact Author)

Shanghai University of Finance and Economics - College of Business ( email )

777 Guoding Road
Shanghai, 200433
China

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics ( email )

Shatin, N.T.
Hong Kong

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