The Impact Of Place-based Policies On Human Capital Accumulation

China’s economy is shifting from the stage of high-speed growth to the stage of high-quality development,and it is decisive to promote the enhancement of human capital and the transformation of comparative advantages.After long-term efforts,the quality of China’s workforce has been generally improved and human capital accumulation has made significant development.However,the problems of low quality and structural imbalance of human capital accumulation in China still exist.In this context,how to achieve a reinforcing relationship between economic development and human capital accumulation is still an important question in academic research and policy design.This essay selects the Western Great Development policy,the Two Controls Zones policy,and the Poverty Alleviation policy,which are the representatives of China’s place-based policies in the past decades,and analyzes whether the above policies have a facilitating effect on human capital accumulation.This dissertation contributes to the literature on the linkage between place-based policies and human capital.Results in this dissertation also have policy implications for further promoting green and coordinated economic development,improving educational inequality,and promoting human capital accumulation.Coordinated regional development,industrial green development,and precise poverty alleviation are some of the most important development strategies in China in recent years.The implementation of these strategies and corresponding policies has significantly contributed to regional economic growth and alleviated economic disparities between regions.Human capital is one of the important factors contributing to economic growth.Have the above place-based policies been effective in increasing the level of human capital accumulation among residents,which in turn has contributed to regional economic growth? Answering this question helps to dissect microindividuals’ responses to existing place-based policies in terms of educational choices and to understand the causes of economic growth in recent years.The impact of the implementation of place-based policies on the accumulation of human capital is often uncertain.Place-based development policies,such as the Western Great Development policy,created a large number of low-skilled jobs in a short period of time.Adolescents could earn higher wages by entering the labor market directly,thus increasing the opportunity cost of continuing their schooling.However,the implementation of the Western Great Development policy also emphasized innovative development and high-quality development and provided jobs more suitable for the employment of high-skilled labor.This could give adolescents an incentive to further enhance their human capital.Restrictive policies on backward industries,such as the Two Controls Zones policy,improved the quality of economic development in the target regions.However,it had a significant negative impact on the labor market,significantly reducing the demand for low-skilled labor in the labor market.In this case,adolescents needed to make a new educational decision,choosing either not to attend school and seek low-skilled employment or to attend school to adapt to the demand for high-skilled labor in the labor market.The implementation of the Poverty Alleviation policy,which increased household income mainly through industrial poverty alleviation,could also have an impact on adolescents’ educational decisions.On the one hand,the promotion of industrial poverty alleviation created new jobs,and adolescents in poor families could enter the labor market to earn income and reduce family burden.On the other hand,the increase in income in families effectively alleviated family budget constraints,so that poor families could afford to invest in their children’s education.Thus Poverty Alleviation policy not only solved the immediate poverty problem but also might contribute to the long-term human capital accumulation of children in poor families.On this basis,this dissertation examines the effects of the Western Great Development policy,the Two Controls Zones policy,and the Poverty Alleviation policy on adolescents’ educational decisions and human capital accumulation.Chapter 1 introduces the research background.On the one hand,low quality and structural imbalances of human capital accumulation still exist in China.On the other hand,promoting coordinated regional economic development,regulating the development of polluting industries,and reducing poverty incidence play important roles in achieving high-quality development.In this context,this dissertation proposes three research questions,namely,whether the Western Great Development policy,the Two Controls Zones policy and the Poverty Alleviation policy have a facilitating effect on human capital accumulation.Then,this dissertation introduces the empirical methods and data and gives the technical roadmap and the structural arrangement of the full-text content.Chapter 2 reviews the relevant literature in two dimensions: the classical human capital accumulation framework and the economic impact of place-based policies.Regarding factors affecting human capital accumulation,Chapter 2.1focuses on government finance,household characteristics,and labor market demand.Regarding the economic and social impacts of regional policies,Chapter 2.2 goes through the impact of regional development policies,environmental control policies,and poverty alleviation policies on macroeconomic society and micro-household individuals.Through a review of the existing literature,Chapter 2.3 summarizes the shortcomings of existing studies and then presents the research theme of this dissertation.Chapter 3 examines whether the Western Great Development policy affects adolescent human capital accumulation.By selecting treatment and control groups on both sides of the Western Great Development boundary line,this dissertation combines the 2010 Census microsampling data to construct an adolescent birth cohort and uses a difference-in-difference model to estimate the effect of the Western Great Development on adolescent human capital accumulation.The results show that the Western Great Development has a significant contribution to adolescent human capital accumulation,and the policy has a greater impact on female adolescents.The robustness check verifies that the benchmark regression results are consistent with the parallel trend hypothesis.The benchmark results are still robust if we adjust the bandwidth,define the birth cohort in a different way,and exclude the extreme values of the sample.At the regional level,Chapter 3.6 shows that the promotion effect of the Western Great Development on human capital accumulation is more significant for regions with higher levels of education and higher levels of economic development.The results of the mechanism analysis suggest that the Western Great Development primarily influences adolescents’ educational choices and the achievement of human capital accumulation by increasing the demand for skilled labor in the labor market and increasing the expected returns to education.Chapter 4 discusses whether the Two Controls Zone policy has a facilitating effect on adolescent human capital accumulation by empirical analysis.Based on the regional differences in the implementation of the Two Controls Zone and the birth cohort differences of adolescents,Chapter 4.4.1 uses a difference-indifferences model in the benchmark regression.The results show that the Two Controls Zone significantly contributes to adolescents’ human capital accumulation,and is manifested by increasing their probability of acquiring a high school education and the number of years of education they receive.Robustness checks partially exclude the confounding caused by population mobility,age differences in schooling,and contemporaneous policies.Regressions using samples from neighboring cities and neighboring counties confirm that the baseline results are plausible.In addition,Chapter 4.4 and 4.5 confirm the robustness of the benchmark regressions by means of parallel trend tests and placebo test.The heterogeneity analysis finds that the effects of the Two Controls Zones on human capital accumulation differ at both the district level and the individual level.Specifically,the human capital enhancement effect of the policy is greater for adolescents in rural areas and those with less educated parents.At the regional level,the verified effects are more pronounced for areas with higher pollution,higher industrial ratios,and higher levels of innovation.Finally,this chapter shows that increases in skilled labor demand,higher expected returns to education,and improved health of individual adolescents are three important channels through which the Two Controls Zone policy promotes human capital accumulation among adolescents.Chapter 5 examines the Poverty Alleviation policy’s effects on adolescent human capital accumulation and analyzes whether the policy helps promote gender equality in education.This Chapter finds that the Poverty Alleviation policy significantly contributes to adolescents’ human capital accumulation in poor areas,increasing their probability of obtaining high school education and years of education and that this effect mainly comes from the enhancement of female adolescents’ human capital.Results of robustness checks confirm that the baseline regression results are robust by testing the parallel trend hypothesis,adjusting the way the birth cohort is set up,and selecting the sample at the district level.The results of the heterogeneity analysis indicate that the effect of the Poverty Alleviation policy on human capital accumulation is more significant for districts with lower levels of economic development.In the mechanism analysis section,this essay shows that the two channels through which the Poverty Alleviation policy promotes human capital accumulation are increasing education and training expenditures of poor families and improving the educational environment in poor areas.This dissertation makes three main contributions.First,this dissertation enriches the academic research related to the impact of place-based policies and labor market demand shocks on human capital accumulation.Second,this dissertation evaluates the existing place-based policies in China from a new perspective: human capital accumulation.Third,this dissertation uses multiple methods to address the endogeneity problems and conduct robustness tests in the empirical process,which effectively increases the reliability of these findings and has implications for the study of other place-based policies.Based on the findings of this dissertation,policy recommendations are proposed from the perspective of human capital accumulation under the impacts of place-based policies.First,this dissertation attaches importance to policies aiming to narrow the development gap between regions,which plays an unintended role in narrowing the educational gap between regions and the gender gap in education within targeted regions.Second,the design of environmental regulations should consider the response of residents in targeted regions.As shown in Chapter 4,the youth in regions targeted by environmental policies respond to such policies by improving their schooling,suggesting that pollution control policies can lead to labor mobility from dirty and unskilled sectors to clean and skilled sectors.Third,governments should continue to pay attention to poverty reduction that not only increases the income of the poor but also improves the human capital accumulation of the youth,suggesting an unintended and positive impact on residents in targeted regions.Finally,the limitations of this research are clarified from the perspectives of research subjects and research methods,variable setting methods,and sample selection methods.Directions for future research are also presented.