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IJEM 25,7

Analysis on inter-provincial disparities of Chinas rural education and convergence rate

Empirical analysis on 31 provinces (municipalities) panel data from 2001 to 2008
Tongwei Xie
Research Institute of Finance and Economics, Shanghai University of Finance and Economics, Shanghai, China
Abstract
Purpose This article aims to analyze inter-provincial disparities of rural education and the convergence rate, and to discuss the effects of compulsory education reform after 2001. Design/methodology/approach The article estimates the rural average education years and education Gini coefcients of Chinas 31 provinces (municipalities) beside Hong Kong, Macao and Taiwan from 2001 to 2008, and applies the method of economic convergence. Findings The results show that after the reform of rural compulsory education, inter-provincial rural education disparities and educational equality have been signicantly improved and trend to convergence; nevertheless the convergence rate on inter-provincial disparities of education equality declines. The defects of the education input system county as principle has been a factor that restricts the coordinated development of rural education. Practical limitations This paper suggests that it is necessary for Chinas provincial and central government to afford the expense of compulsory education. Chinas present investment system would also worsen inter-provincial inequities of education. Social implications Education equality is one of the basic social priorities. In China education equality has been improved; however it could be better if Chinas provincial and central government afforded the expenses of compulsory education. Originality/value This paper applies the method of economic convergence to analyze Chinas rural education disparities among its regions. Keywords Average educational years, Educational Gini coefcients, Convergence, China, Education, Educational policy, Rural areas Paper type Research paper

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Received October 2010 Revised December 2010 Accepted February 2011

International Journal of Educational Management Vol. 25 No. 7, 2011 pp. 714-723 q Emerald Group Publishing Limited 0951-354X DOI 10.1108/09513541111172117

1. Introduction Coordinated regional development of education is the reection of educational justice and equality. Uncoordinated educational development among provinces in China has become one of the signicant issues of regional development. In 2001, Chinas government carried out reform of the investment system for compulsory rural education. County as principle replaced classication management. This reform has promoted the development of compulsory rural education in China and has to some extent alleviated the problem of insufcient investment in education, and inter-provincial differences in rural education have also been signicantly reduced. However, recent years practice shows that the county as principle investment

system still cannot solve the problem of rural education poverty. Under the conditions of farmers low income and the county as principle investment system, a county governments nances become the most important determinant of education investment. In fact, most counties cannot ensure adequate investment in education. Counties governments have assumed the burden of compulsory education inputs, while central government and the provincial government share little responsibility. This investment system discourages the further development of compulsory rural education. It is estimated that at present all of Chinas investment in compulsory education, the county governments share is 78 percent, provincial governments share no more than 1 percent, and central governments share much less. Therefore, inter-provincial disparities and inequality of education development are directly inuenced by regional economic differences. On the other hand, because of higher agricultural productivity and rapid economic development, East China is demanding a larger labor force, and the registered system of permanent residence of recent years is not so strict as previously. All of this results in a high level of rural labor mobility. The rural laborers who move to East China mainly come from Central and Western China, and they are better educated than those who stay in local regions. Additionally, in China, the investment system for compulsory rural education has obvious territorial characteristics. This means that the education investment for rural laborers who move to East China comes from the local governments of Central and Western China. As a result, investment and benet in rural education in these regions are signicantly asymmetrical. This phenomenon will eventually reduce local governments incentives for investment in rural education, and could also enlarge inter-provincial education development disparities and regional inequities. In order to analyze these changes in inter-provincial differences in rural education after reform of the education investment system and how the inter-provincial differences converge, after estimating the rural average education years and education Gini coefcients of 31 provinces (municipalities) beside Hong Kong, Macao and Taiwan from 2001 to 2008, this article in addition applies the method of economic convergence to analyze inter-provincial disparities of rural education and the convergence rate. The article also comments on the effects compulsory education reform i.e. county as principle after 2001. 2. Literature review Since 1978 Chinas education has been signicantly improved, but the issue of unbalanced education development also highlights that scholars are concerned about the issue. Wei and Yang (1997) found that regional differences in education development decreased year by year. Wang et al. (1998) and Wu (1999) pointed out that economic development disparities among regions result in an imbalance in education development. Zhu (2003) calculated the education Gini coefcient of inter-regional investment from 1998 to 2000, with the results showing that the inequality of education investment has increased in recent years. Tus (2005) study showed that Chinas regional differences in education could be mainly seen from two aspects: (1) the scale of regional of higher education development and educational investment; and (2) Chinas region differences in education has been enlarged.

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Du (2005) calculated the education Gini coefcient and found that inter-provincial education disparities had been reduced. Zhai (2006, 2007) also found that between 1995 and 2004 basic education disparities declined after his theoretical and empirical analysis. Yang and Li (2007) estimated the education Gini coefcient of Chinas 31 provinces from 1996 to 2004, and pointed out that Chinas education inequality had improved not only within regions, but also among regions. Sun (2008) also measured the education Gini coefcient in different periods, and found that Chinas educational development reduced education inequality within each region. The above research by Chinese scholars show two opposite conclusions, namely that regional differences in education development have been either reduced or enlarged. According to the data used in this literature, research using data from after 2001 tends to see a decrease, while research using data from before 2001 tends to see an increase, because of the implementation of reform of the compulsory education system. However, there are few articles to apply the approach of economic convergence to analyze inter-provincial education disparities. Until now, only Sun (2008) has taken advantage of this method, and his study pointed out that Chinas inter-provincial education disparities had gradually been reduced. Therefore, this paper also utilizes the approach of economic convergence to analyze rural education disparities among Chinas provinces and the convergence speed after investment system reform of rural compulsory education in 2001. 3. Calculations on average education years and education Gini coefcient of Chinas rural areas 3.1 Methods of measurement Education level is divided into ve different qualications (i.e. illiterate or semi-illiterate, primary, junior high school, senior middle school, college or above) and the education years are as follows: . illiterate or semi-illiterate for 0 years; . primary school for six years; . junior high school for nine years; . senior middle school for 12 years; and . college or above for 16 years. The mathematical formula that estimates the average years of education is dened as follows: AEY
5 X i 1

EY i P i :

In this formula, AEY represents average education years, i represents the number of different educational qualications, EYi represents the education years of each education level, and Pi represents the population percentage of each education level in total population. The mathematical formula that estimates the education Gini coefcient is as follows:

  4 X    EGini  TEAi P i1 2 TEAi1 P i ;  i1  where EAi represents the educational achievement percentage of each group. TEAi represents the percentage of total educational achievements, and its formula is: 0 1 TEA
5 X i 1

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EAi

5 B X B i1

B EY i P i BX @ 5 EY i P i
i1

C C C: C A

3.2 Data sources The data were taken from the China Statistical Yearbook and China Population Statistics Yearbook from 2002 to 2009. The statistic criteria was the population aged six years old and above, and according to the calculation formula, we obtain panel data of the average education years and education Gini coefcient from 2001 to 2008. 3.3 Estimation results 3.3.1 Average education years and education Gini coefcient of Chinas rural areas. As shown in Table I, Chinas rural average years of education increased from 6.752 in 2001 to 7.285 in 2008. With the development of Chinas rural education, Chinas rural education inequality has been greatly improved; the education Gini coefcient fell from 0.237 to 0.217. It is notable that in 2005 the level of rural education development declined, and education inequality increased. 3.3.2 Average education years and education Gini coefcient of provinces (municipalities) rural areas. The rural average education years of every province (municipality) increased at different degrees, and rural education inequality was also obviously improved. However, plenty of provinces (municipalities) education development fell back in 2002 and 2005. In 2005, 24 provinces (municipalities) rural average education years declined: they were Tianjin, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Shanghai, Zhejiang, Anhui, Fujian, Jiangxi, Shandong, Henan, Hubei, Hunan, Guangxi, Hainan, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, and Ningxia. Provinces (municipalities) education inequality also increased in both 2002 and 2005. In 2002, these provinces were: Beijing, Tianjin, Hebei, Inner Mongolia, Jilin, Heilongjiang, Jiangsu, Zhejiang, Anhui, Jiangxi, Hunan and Guangdong, Guizhou, Tibet, Shaanxi, Gansu, and in 2005 they were Beijing, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Shanghai, Fujian, Shandong and Henan, Hubei, Hunan and Guangdong, Guangxi, Hainan, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Qinghai, Ningxia, and Xinjiang.
Category Average education years Education Gini coefcient 2001 6.752 0.237 2002 6.788 0.240 2003 6.871 0.235 2004 7.000 0.231 2005 6.782 0.248 2006 7.028 0.231 2007 7.183 0.223 2008 7.285 0.217 Table I. Average education years and education Gini coefcient of Chinas rural areas, 2001-2008

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4. Comparison of rural education development In order to reect the changes from 2001 to 2008 in educational disparities among provinces (municipalities), this paper shows four GIS charts of average education years and education Gini coefcient of provinces (municipalities) rural areas. 4.1 Comparison of average education years From 2001 to 2008, 31 provinces (municipalities) rural education was signicantly improved, and inter-provincial disparities in rural education were also reduced. In Figure 1, in 2001, Jiangxi is the only province whose average education years of education in rural areas is above eight years (blue), while Beijing, Tianjin, Shanxi, Jiangxi also achieved this in 2008. The rural average education years of Beijing, Tianjin, Hebei, Shanxi, Liaoning, Jilin, Heilongjiang, Henan, Hunan, Guangdong were between seven years and eight years (green) in 2001; this increased to 17 provinces in 2008 (Hebei, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Shanghai, Jiangsu, Zhejiang, Shandong, Henan, Hubei, Hunan, Guangdong, Guangxi, Hainan, Shaanxi, and Xinjiang). The average years of education in rural Inner Mongolia, Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Shandong, Hubei, Guangxi, Hainan, Chongqing, Sichuan, Shaanxi, Ningxia and Xinjiang was between six and seven years (yellow) in 2001. In 2008 this number dropped from 15 to eight provinces (Anhui, Fujian, Chongqing, Sichuan, Yunnan, Guizhou, Gansu, and Ningxia). The average years of education in rural Guizhou, Yunnan and Gansu was between ve and six years (brown) in 2001; however in 2008 only the province of Qinghai saw this level. The rural average education years in Tibet and Qinghai was below ve years (red) in 2001, while only Tibet showed this level in 2008. 4.2 Comparison of education Gini coefcient With the development of rural education, from 2001 to 2008, inequality in rural education in 31 provinces (municipalities) was also greatly improved. In Figure 2, in 2001 the provinces (municipalities) with a rural education Gini coefcient below 0.20 (blue) were Hebei, Shanxi, Inner Mongolia, Jilin, Heilongjiang, Shanghai; in 2008 they were Hebei, Shanxi, Inner Mongolia, Jilin, Heilongjiang, Shanghai, Hubei, Guangdong, Guangxi, and Hainan. Provinces (municipalities) with a rural education Gini coefcient between 0.20 and 0.30 (green) in 2001 were Beijing, Tianjin, Liaoning, Zhejiang, Anhui, Fujian, Jiangxi, Shandong, Henan, Hubei, Hunan, Guangdong, Guangxi, Hainan,

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Figure 1. Thirty-one provinces (municipalities) rural average education years in 2001 (left) and 2008 (right)

Chongqing, Sichuan, Guizhou, Gansu, and Tibet; in 2008 they were Beijing, Tianjin, Liaoning, Jiangsu, Zhejiang, Anhui, Fujian, Jiangxi, Shandong, Henan, Hunan, Chongqing, Sichuan, Guizhou, Yunnan, Gansu, Tibet, Ningxia and Xinjiang. Provinces (municipalities) with a rural education Gini coefcient between 0.30 and 0.40 (yellow) in 2001 were Jiangsu, Yunnan, Qinghai and Xinjiang, while only Qinghai had this level in 2008. Provinces (municipalities) with a rural education Gini coefcient above 0.40 (red) in 2001 were Shaanxi and Ningxia, while only Shaanxi showed this level in 2008. According to Figure 2, rural education equity in Northeast China and North China is better than in other regions, and in recent years Ningxia is the province that has seen the greatest improvement in education fairness. 5. Convergence of rural education disparity among provinces 5.1 s convergence of rural education disparities According to the denition of s convergence, the changes of dispersion are the foundation to judge whether rural education disparity among provinces is converging. Here we use the variation coefcients of the average education years and the education Gini coefcient. The means and variations of the average education years and education Gini coefcient (Figures 3 and 4) show that after the reform of the investment system for rural compulsory education in 2001, Chinas inter-provincial education development disparities and inequalities shrank year by year (except for 2005), which shows signicant s convergence. 5.2 b convergence of inter-provincial rural education disparities For the b convergence analysis, this paper uses Barro and Sala-i-Martins (2005) model. The b convergence model is as follows:   yi;t 1 1 2 e2bT log yi;t2T mi : B2 log yi;t2T T T Using the panel data of the average education years and education Gini coefcient from 2001 to 2008, divided into three periods (2001-2004, 2005-2008 and 2001-2008), the convergence speeds derived are shown in Tables II and III. In all three periods i.e. 2001-2004, 2005-2008 and 2001-2008 the inter-provincial disparities of education development showed convergence. The convergence rates

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Figure 2. Thirty-one provinces (municipalities) rural education Gini coefcients in 2001 (left) and 2008 (right)

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Figure 3. Means and variations of rural average education years among provinces from 2001-2008

Figure 4. Means and variations of rural education Gini coefcient among provinces from 2001-2008

Model Table II. Convergence speeds of education development disparities

2001-2004 0.071 * * * 0.30 0.27

2005-2008 0.099 * * * 0.87 0.87

2001-2008 0.042 * * * 0.50 0.48

b R2 ~2 R

Note: * * *Indicates 1 percent signicance level

were 0.071 percent, 0.099 percent, and 0.042 percent, respectively. The inter-provincial disparities of rural education inequality also show convergence, with convergence rates of 0.152 percent, 0.061 percent, and 0.107 percent, respectively. This is mainly because of the reform of the investment system for compulsory education after 2001,

which increased investment in rural education, and rural education has been improved signicantly. In 1985, China began to implement the reform of education nance and the hierarchical management system. In this system, the burden of compulsory education structure is irrational. Central and provincial government share little of the burden, but township government and farmers have to shoulder the burden of most of the investment in compulsory education. As the township government and farmers do not have sufcient nance, rural education has faced a serious shortage of funds. Since 2001, in order to address the input problem of rural compulsory education, the county government became the main investor in compulsory rural education. The convergence rates show that the reform effect of the nancial system for rural compulsory education is obvious. Further, we contrast the period 2001-2004 with 2005-2008: it is clear that the convergence rate of education development disparities in 2005-2008 is 30.77 percent faster than in the period 2001-2004, but the convergence rate of educational inequality disparities in the period 2001-2004 is 1.49 times faster than in the period 2005-2008. This difference indicates that the improvement effect of inter-provincial inequality disparities in education declined. To some extent, the reform of the rural compulsory education system after 2001 accelerated the development of education and improvements in education equality. However, this is still not enough. Provincial and central government invest relatively little in education. But county governments can afford adequate funds for the development of rural education. Therefore, rural education investment is decided by local government revenue, which is directly subject to local economic development. Also, economic development disparities among regions signicantly affected inter-provincial differences in rural educational inequality. In Central and Western China, local governments could not provide adequate investment in rural education because the economy there is less developed than in Eastern China. Once the economic development disparities are decreased, the convergence rate of inter-provincial differences in education equality will also decrease. Moreover, currently, the number of Chinas mobile rural laborers is great. According to Chinese government statistics, the total has reached 230 million, of which over 150 million have been out of work more than six months. Those rural laborers are better educated than others who stay in their local areas. They are mainly from Central and Western China and move to Eastern China. Additionally, Chinas education investment system has obvious territorial characteristics, which means that the education input of those people comes from local governments in Central and Western China. However, Eastern China could take advantage of them without investment in their education. Thus, this will discourage local government investment in compulsory education; furthermore, it will worsen education inequality among provinces.

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Model

2001-2004 0.152 * * 0.28 0.26

2005-2008 0.061 * * * 0.54 0.52

2001-2008 0.107 * * * 0.64 0.63 Table III. Convergence speeds of education inequality disparities

b R2 ~2 R

Notes: * *Indicates 5 percent signicance level; * * *indicates 1 percent signicance level

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6. Conclusions After the investment system for rural compulsory education was reformed in 2001, rural education developed signicantly, and inequalities in rural education have been greatly reduced. Inter-provincial disparities of the education development and educational inequality show signicant convergence. However, the convergence rates of inter-provincial disparities on education inequality have decreased. This is because the new investment system for rural compulsory education still cannot provide adequate funds, especially in Central and Western China. In addition, this investment system has obvious territorial characteristics; local government in Central and Western China cannot receive symmetrical returns because of large-scale rural labor mobility. This phenomenon not only reduces local governments incentives to invest in rural education, it also worsens inter-provincial inequalities in education. Therefore, Chinas education input system should be regulated again. In fact, in developed countries, most of the investment in primary education is provided by central government. It is necessary for Chinas provincial and central government to meet the expenses of compulsory education.
References Barro, R.J. and Sala-i-Martin, X. (1995), Economic Growth, McGraw-Hill, New York, NY. Du, P. (2005), Study on education differences among Chinas schools based on Gini coefcient, Education and the Economy, Vol. 3, pp. 30-4. Sun, B. (2008), Convergence test on Chinas education development in the past thirty years after reform and opening policy, Journal of Education, Vol. 12, pp. 14-18. Tu, D. (2005), Educational disparities research, Education Science, Vol. 2, pp. 8-11. Wang, S., Du, Y. and Liu, Y. (1998), Analysis on imbalance in educational development in China, Education Research, Vol. 6, pp. 19-23. Wei, H. and Yang, D. (1997), Decentralization and regional educational differences, China Social Sciences, Vol. 1, pp. 98-112. Wu, D. (1999), Development of regional gaps in Chinas education imbalance problems of education development, Education Research, Vol. 7, pp. 22-6. Yang, J. and Li, X. (2007), Education inequality, human capital accumulation and economic growth: an empirical study on China, Quantitative Economics & Technical Economics Research, Vol. 2, pp. 37-45. Zhai, B. (2006), Balanced development of education: theory, indicators and calculation method, Education Research, Vol. 3, pp. 16-28. Zhai, B. (2007), Empirical analysis on balanced development of basic education in China, Education Research, Vol. 7, pp. 22-30. Zhu, M. (2003), An empirical study on education investment fair among Chinas provinces, Economic Issues, Vol. 2, pp. 121-4. Further reading Barro, R.J. and Lee, J.W. (1993), International comparisons of educational attainment, Journal of Monetary Economics, Vol. 32 No. 3, pp. 364-94. Barro, R. and Lee, J. (1993), International measures of schooling years and schooling quality, American Economic Review, Vol. 86 No. 2, pp. 218-23.

Bernard, A.B. and Durlauf, S.N. (1996), Interpreting tests of the convergence hypothesis, Journal of Econometrics, Vol. 71, pp. 161-73. Kyriacou, G. (1991), Level and growth effects of human capital: a cross-country study of the convergence hypothesis, Research Report 91-26, Starr Center for Applied Economics, New York University, New York, NY. Lucas, R. Jr (1988), On the mechanics of economic development, Journal of Development Economics, Vol. 22 No. 1, pp. 3-42. Mankiw, N., Romer, D. and Weil, D. (1992), A contribution to the empirics of economic growth in the neoclassical model, Quarterly Journal of Economics, Vol. 107, pp. 407-37. Thomas, V., Wang, Y. and Fan, X. (2000), Measuring Education Inequality: Gini Coefcients of Education, The World Bank Institute, Washington, DC. Thomas, V., Wang, Y. and Fan, X. (2003), Measuring education inequality: Gini coefcients of education for 140 countries, 1960-2000, Journal of Educational Planning and Administration, Vol. XVII No. 1. Zhai, B. (2008), Educational Equilibrium Theory Analysis on Balanced Development of Basic Education in China, Peoples Education Press, Beijing, pp. 46-50. Corresponding author Tongwei Xie can be contacted at: yarhan20042005@yahoo.com

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