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<p>This paper estimates the causal impact of public education spending on the educational attainment of children from different family backgrounds. We exploit exogenous variation in the temporal and geographical impacts of the 2006 nationwide 4% education spending target in China to estimate the causal effects of public education spending. The empirical findings suggest that although the 4% Target Policy reduces overall dropout rates, it strengthens the link between parents’ background and children’s education, equivalently deepening educational inequality. The underlying mechanism for these results is that advantaged families respond to increased public education investment by amplifying private education spending and engaging more actively in school district selection, whereas disadvantaged families reduce their complementary investments. Therefore, governments need to integrate family responses into education policies.</p>

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Public education spending, family background, and child education attainment

  • 期刊论文

  • 发表日期：

    2026年1月4日

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  • Shuang Yu,
  • Xiaojun Zhao,
  • Yinhe Liang

摘要

This paper estimates the causal impact of public education spending on the educational attainment of children from different family backgrounds. We exploit exogenous variation in the temporal and geographical impacts of the 2006 nationwide 4% education spending target in China to estimate the causal effects of public education spending. The empirical findings suggest that although the 4% Target Policy reduces overall dropout rates, it strengthens the link between parents’ background and children’s education, equivalently deepening educational inequality. The underlying mechanism for these results is that advantaged families respond to increased public education investment by amplifying private education spending and engaging more actively in school district selection, whereas disadvantaged families reduce their complementary investments. Therefore, governments need to integrate family responses into education policies.