Education and Human Capital

Development

Meiyan Wang
Institute of Population and Labor Economics
Chinese Academy of Social Sciences

May 31-June 1, 2010

The views expressed in this paper are the views of the author(s) and do not necessarily reflect the views
or policies of the Asian Development Bank (ADB), or its Board of Directors or the governments they
represent. ADB does not guarantee the source, originality, accuracy, completeness or reliability of any
statement, information, data, finding, interpretation, advice, opinion, or view presented, nor does it make
any representation concerning the same.
 Outline
• Education and human capital development are
important for China

• Education and human capital development in

China

• Challenges for China’s education

• Policy suggestions on China’s education and

human capital development
 Data
• Statistical Yearbooks (various years)

• 1990 census, 2000 census and 2005 mini

census
Education and Human Capital Development
Are Important for China

• The contribution of education and human capital

for China’s economic growth (World Bank, 1998;
Cai and Wang, 1999, etc)

• The contribution of education and human capital

for China’s labor productivity (Cai, Du and Qu,
2009, etc)

• The increasing return of China’s human capital

(Zhang et al., 2005, etc)
The Contribution of Education and Human Capital
for China’s Economic Growth (1978-1998)

Labor Unexplained
transfer 3% Capital
21% 28%

Human
capital Labor
24% 24%
 The Contribution of Education and Human
Capital for China’s Labor Productivity
• According to Cai, Du and Qu (2009),
marginal labor productivity in
manufacturing will increase by 24 percent
if average years of schooling increases by
one year
 The Increasing Return of China’s
Human Capital
12

10.0 10.1 10.2

10
Educational return (%)

8.1
8 7.3
6.7 6.8 6.7

6 5.2
4.6 4.7 4.7
4.0 4.3
4

0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Education and Human Capital Development

• Improvement of educational level

• Development of different educational stages

--- Compulsory education (6 years of primary
school and 3 years of junior secondary
school)
--- Higher education

• Increase of educational funds (from

government, society and family)
 Improvement of Educational Level

• Years of schooling:
1982: 6.13 1990: 6.82
2000: 8.17 2005: 8.37

• Illiterate rate:
1964: 33.58% 1982: 22.81%
1990: 15.88% 2000: 6.72%
Development of Compulsory Education
• Compulsory Education Law in 1986 designated
nine years of education as compulsory for all
children

• The Action Plan for Revitalizing Education in the

21st Century in 1999 confirmed a commitment to
implementing compulsory education across the
country

• Compulsory Education Law was amended in

2006 and many new contents were added
 Development of Compulsory Education
100
Net enrollment ratio and promotion rate (%)

90

80

70

60

50

40

30

20
1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008
Net enrollment ratio of PS Promotion rate from PS to JSS
Promotion rate from JSS to SSS Promotion rate from SSS to HE
 Development of Higher Education
• Higher education expansion since 1999

• Gross entrance rate of higher education:

1998: 9.8% 2005: 21%
 Development of Higher Education
700 2500
Student enrollment
New student enrollment and graduates

New student enrollment

Student enrollment (ten thousand)

600
Graduates 2000
500
(ten thousand)

1500
400

300
1000

200
500
100

0 0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
 Increase of Educational Funds
1400

1200
(hundred million)

1000

800

600

400

200

0
1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007
Total educational funds Government educational funds
 Increase of Educational Funds
5.0

4.0
Proportion (%)

3.0

2.0
Proportion of total educational funds in GDP
Propor tion of government educational funds in GDP
1.0
91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08
19

19

19

19

19

19

19

19

19

20

20

20

20

20

20

20

20

20
 Challenges for China’s Education and
Human Capital
• Educational level

• Different educational stages

--- Compulsory education
--- Vocational education
--- Higher education

• Educational funds (from government, society and family)

• Education of migrant workers’ children and left-behind

children in rural areas
 Educational Level: Urban-rural Gap

12
9.92
9.38
Years of schooling (year)

10 8.86

8 7.52
6.80
6.08
6

Urban Urban Urban Rural Rural Rural

males females total males females total
 Educational Level: Urban-rural Gap

Educational level Urban working- Rural working-

age population age population
（%） （%）
Primary school and below 25.0 51.0
Junior secondary school 39.2 40.5
Senior secondary school 22.5 7.6
College and above 13.3 1.0
Total 100 100
 Vocational Education: Number of
Schools Has Been Declining
12000

10000

8000
Number of schools

6000

4000

2000

0
1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007
 Student-teacher ratio

10
15
20
25

0
5
1985

1987

1989

1991

1993

1995

1997

1999
teacher Ratio

2001

2003

2005

2007
Vocational Education: High Student-
 Student-teacher ratio

12
15
18

0
3
6
9
1985

1987

1989

1991

1993

1995

1997
teacher ratio

1999

2001

2003

2005
Higher Education: High Student-

2007
 Higher Education: Employment
Difficulties of College Graduates

• Number of college graduates has been

increasing rapidly since the expansion of higher
education ( from 1999)

• However, many college graduates can’t meet

the demand of labor market well

• College graduates meet employment difficulties

 Educational Funds
• The objective in China’s National Education
Reform and Development Outline in 1993 :
proportion of government educational funds in
GDP reaches 4% in 2000

• However, it was only 3.48% until 2008

• Outline of National Medium and Long-term

Education Reform and Development Plan in
2010: 4% in 2012
 Educational Funds: Government
Educational Funds/GDP is Less than 4%
5.0

4.0
Proportion (%)

3.0

2.0
Proportion of total educational funds in GDP
Propor tion of government educational funds in GDP
1.0
91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08
19

19

19

19

19

19

19

19

19

20

20

20

20

20

20

20

20

20
 Educational Funds: Government Educational
Funds/Total Government Expenditure is Low

Proportion of Government Educational Funds

in Total Government Expenditure

25

20
Proportion (%)

15

10

0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Educational Funds: from Government,
Society and Family
Education of Migrant Workers’ Children
• Migrant workers’ children are entitled to go to schools in
cities for free according to the policies in most cities

• However, in reality, that is not the case. Migrant workers

have to pay extra money for the education of their
children in cities

• A large proportion of migrants’ children have to go to

schools for migrant workers’ children. Usually the quality
of those schools is worse than that of urban schools

• Migrant workers’ children can not attend college

entrance examination in cities and have to go back to
their hometowns
 Education of Migrant Workers’ Children

Age group 6-11 12-14 15-17 Total

Enrollment
rate Boys Girls Boys Girls Boys Girls Boys Girls

Children of
Migrant 95.68 95.43 94.37 94.15 46.33 36.62 78.29 69.83
Workers
Urban
96.36 96.56 96.56 96.29 82.26 82.82 92.12 92.23
children
Left-behind
96.20 96.13 96.45 95.88 80.31 79.38 92.58 92.01
children
Rural
95.53 94.98 94.93 93.65 70.39 69.23 89.46 88.52
children
 Education of Left-behind Children in
Rural Areas
Age group 0-5 6-11 12-14 15-17 Total

Mother or 44.70 42.37 49.56 57.63 47.14

father are
absent
Both mother 55.30 57.63 50.44 42.37 52.86
and father
are absent
Total 100 100 100 100 100
 Policy Suggestions on Education and
Human Capital Development
• Educational level

• Different educational stages

--- Compulsory education
--- Vocational education
--- Higher education

• Educational funds (from government, society and family)

• Education of migrant workers’ children and left-behind

children in rural areas
 Policy Suggestions on Education and
Human Capital Development

• Implement Compulsory Education Law more

strictly, especially in rural areas

• Increase inputs (including teachers, schools and

funds, etc) on vocational education

• Adjust contents of higher education and

make college graduates better meet the
demand of labor market
 Policy Suggestions on Education and
Human Capital Development

• Increase the proportion of government educational

funds in GDP

• Increase the proportion of government educational

input and reduce the proportion of family
educational input in total educational funds

• Provide migrant workers’ children the same opportunities

as urban children to access to education

• Improve quality of education in rural areas

Thanks!