Education and the Poverty Trap in Rural China: Closing the Trap

The research was conducted while Li Shi and Deng Quheng were visiting the Department of Economics, University of Oxford, from Beijing Normal University and the Institute of Economics, Chinese Academy of Social Sciences, respectively. We thank Nina Fenton for her research assistance, Chris Colclough for his support, and the editors and two referees for very helpful comments. We are grateful to the UK Department for International Development (DfID) for financial support through John Knight's membership of the Research Consortium on Educational Outcomes and Poverty (RECOUP), which is based partly at the Centre for the Study of African Economies in the Department of Economics, University of Oxford.

Abstract

This is an ambitious attempt to view the relationships involving education and income as forming a system, and one that can generate a poverty trap. The setting is rural China, and the data are from a national household survey for 2002, designed with research hypotheses in mind. The paper shows how and why the returns to education vary according to household and community income. It examines the effects of education on income, innovation, health and happiness, and shows how education can be important in helping people to escape from various dimensions of poverty. The results are brought together to form an empirical model of a poverty trap, and the implications for poverty analysis and for educational policy are considered.

Notes

The research was conducted while Li Shi and Deng Quheng were visiting the Department of Economics, University of Oxford, from Beijing Normal University and the Institute of Economics, Chinese Academy of Social Sciences, respectively. We thank Nina Fenton for her research assistance, Chris Colclough for his support, and the editors and two referees for very helpful comments. We are grateful to the UK Department for International Development (DfID) for financial support through John Knight's membership of the Research Consortium on Educational Outcomes and Poverty (RECOUP), which is based partly at the Centre for the Study of African Economies in the Department of Economics, University of Oxford.