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Conducting Policy-Based Education Finance Research in China

Conducting Policy-Based Education Finance Research in China

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Conducting Policy-Based Education Finance Research in China. The China Institute for Educational Finance Research (CIEFR). China’s first academic institution for educational finance research (Oct . 2005) An innovative joint-venture: MOF, MOE, and Peking University. - PowerPoint PPT Presentation

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Page 1: Conducting Policy-Based Education Finance Research in China

Conducting Policy-Based Education Finance Research in China

Page 2: Conducting Policy-Based Education Finance Research in China

The China Institute for Educational Finance Research (CIEFR)

• China’s first academic institution for educational finance research (Oct. 2005)

• An innovative joint-venture: MOF, MOE, and Peking University.

• Two major areas of activity:– Policy consulting– Policy-related research

Page 3: Conducting Policy-Based Education Finance Research in China

Policy Consulting• Challenges:

– Small windows of time– Topics change quickly – Little empirical evidence on which to base suggestions– Pressure…

• Opportunities from engaging in policy consulting:– Immediately access to policymakers

• Understand key concerns• Learning• Dissemination of research findings

– Support for conducting research projects

Page 4: Conducting Policy-Based Education Finance Research in China

Policy consulting: Process

• Refer to past empirical studies in China• Utilize existing data

– Our own past surveys– Other large-scale survey/census data– government statistics (public)

• Review foreign country practices and policies• Short-term surveys, interviews, site visits

Page 5: Conducting Policy-Based Education Finance Research in China

Policy Consulting: for the MOF/MOE

Examples:• Reform of Education Finance Statistics System• Reform of the Rural Compulsory Education Guarantee Funding

Mechanism• Key Policies of Increasing Funding for China’s Education During

the Eleventh Five-Year Plan Period• National Plan for Medium and Long-Tem Education Reform and

Development: Issues of Educational Finance• Financial Support Mechanisms for R&D at Higher Education

Institutions• Budget Provision for National Universities

Page 6: Conducting Policy-Based Education Finance Research in China

Policy-related research

(1) Descriptive– using randomly sampled, representative data

(2) Policy or Program Impact Evaluation– Randomized Control Trials (RCTs)– Quasi-experiments– Assessment using reliable/valid measures/outcomes

(3) Action-based Research

Page 7: Conducting Policy-Based Education Finance Research in China

Some Current Areas of Research

(1) Vocational Education(2) Academic High School Education (3) Higher Education

(4) Migrant Education(5) Early Childhood Education(6) Disabilities and Education

Page 8: Conducting Policy-Based Education Finance Research in China

First…Background:

Changes in the supply/demand of Human Capital in China

Page 9: Conducting Policy-Based Education Finance Research in China

The size of economy in 2008 was more than16 times that in 1978

It took the US nearly 100 years from 1870 to 1970 … to grow by 10 times!

Page 10: Conducting Policy-Based Education Finance Research in China

Percent of Population in the Agricultural Sector

Income per Capita

US and other OECD nations

Ethiopia, Rwanda, etc.

“Iron Law of Economic Development”

Data from the World Bank

This is sometimes called the Kuznet’s curve

Page 11: Conducting Policy-Based Education Finance Research in China

Percent of Pop’n in Ag. Sector

Income per Capita

Development = IndustrializationModernization = Urbanization

Zero: there are no high income countries in world with more than 10% of their populations that live in agriculture10-20%

Page 12: Conducting Policy-Based Education Finance Research in China

Percent of Pop’n in Ag. Sector

Income per Capita

“Miracle Development—with Korean Characteristics”

Korea—1950s

Korea—1974

Korea—today

Korea—1987

Page 13: Conducting Policy-Based Education Finance Research in China

Percent of Pop’n in Ag. Sector

Income per Capita

In 1980, China was:

• Poor

• Rural

• Agricultural

China in 1980s

China at the start of Economic Reforms

Page 14: Conducting Policy-Based Education Finance Research in China
Page 15: Conducting Policy-Based Education Finance Research in China
Page 16: Conducting Policy-Based Education Finance Research in China
Page 17: Conducting Policy-Based Education Finance Research in China

China is moving along the Transformation Path, according to the Iron Law

• From left to right … INCOME

• From top to down … URBANIZATION/INDUSTRIALIZATION

Page 18: Conducting Policy-Based Education Finance Research in China

Becoming better off … income rising …

Page 19: Conducting Policy-Based Education Finance Research in China

Shenzhen in

1980 …

… and 2000

Page 20: Conducting Policy-Based Education Finance Research in China

Overall Increase in Off-farm Work

0%

20%

40%

60%

80%

100%

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Year

off -farm busy season part ti me farm onl y

In 2008 more than 90% of households have at least 1 family member (or son / daughter) working off the farm

In 1980: only 4% worked full time off the farm

63%

2008

Page 21: Conducting Policy-Based Education Finance Research in China

Transformation Path

Percent of Pop’n in Ag. Sector

Income per Capita

So it is clear that as China is growing (moving left to right across the graph), it also is beginning to move “down” the transformation path …

this is “development”

Page 22: Conducting Policy-Based Education Finance Research in China

The movement of this labor … in vast quantities is what helps drive growth in the early stages of development …

Page 23: Conducting Policy-Based Education Finance Research in China

0.7

23.65

21.76

13.56

24.91

2.634.09

0.52

27.52

0

4

8

12

16

20

24

28

中国 美国 日本 15欧盟 国 韩国 澳大利亚 墨西哥 巴西 斯里兰卡

/美

元小

Hourly Wage, 1990s

China US Australia Mexico Brazil Sri Lan.Japan EU Korea

0.50

A low unskilled wage in the 1980s/1990s is why such a large share of the things the world makes are manufactured in China today!

Page 24: Conducting Policy-Based Education Finance Research in China

This was also enabled by China’s education and health systems during the 1970 and 1980s seemed to have played an important role

• Infectious diseases were controlled; infant mortality fell …

• School authorities got everyone into school (at least elementary school) to teach the rudiments of reading and arithmetic … instill discipline to be a good worker!

Page 25: Conducting Policy-Based Education Finance Research in China

0

500

1000

1500

2000

2500

3000

3500

1978 1983 1988 1993 1998 2003

Year

Ann

ual w

age

(197

8 re

al y

uan)

Collective Other

2007

Unskilled wage

Since 2000

Wage rises in coming years

But, the rise in wages is now happening in China …

Wage have risen rapidly recently …

In coming years … projected to rise even faster …

Page 26: Conducting Policy-Based Education Finance Research in China

Future growth of GDP (5, 6, 7 or 8 %/year) demand for labor will increase

Page 27: Conducting Policy-Based Education Finance Research in China

Figure VII-1: Crude Birth and Death Rates

0

10

20

30

40

50

601953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

Vit

al

Rate

s p

er

1000

Births

Deaths

Birth rates

Death rates

Supply of labor is falling …

In 1990 ≈ 25 million babies/year /

In 2010 ≈ 15 million babies/year … and falling

today

Page 28: Conducting Policy-Based Education Finance Research in China

Summary: Implications

• China continues to grow: RISING DEMAND

• Size of labor force falls: FALLING SUPPLY

Rising wages in the future

Changing industrial structure

By 2025 to 2030

$10-15/hour

Page 29: Conducting Policy-Based Education Finance Research in China

Are rising wages bad?

• Of course not…“good riddance to sweat shop jobs.”

• But, with higher wages, China will have to move itself up the productivity ladder …

Page 30: Conducting Policy-Based Education Finance Research in China

So: China’s real human capital challenge is coming …

– Can China become competitive in industrial sectors requiring medium and high skilled human capital?

– Can it maintain relative equality/equity in the process?

Page 31: Conducting Policy-Based Education Finance Research in China

“Achievements” so far in Education

• 1990s: universal 9-year compulsory education

• Late 1990s: higher education expansion– GER went from 5-6% in the mid-1990s to 29% in 2009– Largest higher education system in the world

• 2000s: high school expansion– GER went from 40% in late 1990s to 79% in 2009– mandated 50:50 ratio between regular and vocational

Page 32: Conducting Policy-Based Education Finance Research in China

What about Educational Quality?

• Shanghai PISA Results 2009 (PISA is for up to age 15 years old)

• Quality in the rest of China?

• Not much is known about quality in terms of student outcomes.

Page 33: Conducting Policy-Based Education Finance Research in China

CIEFR’s Research: Three Areas

(1) Vocational Education and Training

(2) Academic High School

(3) Higher Education (financial aid)

Page 34: Conducting Policy-Based Education Finance Research in China

(1) Investment in Vocational vs. General Schooling:

Evaluating China’s Expansion of Vocational Education and

Training (VET)

Page 35: Conducting Policy-Based Education Finance Research in China

Research Questions about VETHow to balance investments in vocational vs. general education to support economic growth and reduce social inequality?

(1) What are the returns to VET? if negligible, policymakers may consider slowing the expansion or improving the quality of VET.

(2) What are the factors that keep junior high school graduates in poor, rural areas from continuing with their studies? A fairly low proportion of them go on to any type of high school. (3) What is the quality and cost-effectiveness of VET programs? Few mechanisms to evaluate the quality of VET programs

Page 36: Conducting Policy-Based Education Finance Research in China

(2) Supporting Disadvantaged Junior High Students

• Randomized trials involving junior high students in poor areas: – Vouchers high school (academic or VET)– Edu/career counselling (returns to school, career awareness)

• Outcomes:– Persistence/dropout in junior high school– Academic (exam) performance– High school matriculation rates

• Baseline and Follow-up Surveys:– 2 provinces– 132 rural public junior hi schools, 473 classes– 19,832 seventh-grade students

Page 37: Conducting Policy-Based Education Finance Research in China

132 junior high schools first year students (~20000)

Control: 22 JHSs, 308 poor stus

Long :22 JHSs

41 classes: no training

164 poor students – no $$$

Long+$$$: 22 JHSs

86 of 172 poor students got $$$

80 of 160 poor students got $$$

140 poor students—no $$$

35 classes: long training

43 classes: no training

40 classes: long training

$$$:22 JHSs

79 classes

158 of 316 poor students got $$$

Short+$$$:22 JHSs

36 classes: no training

72 of 144 poor students got $$$

39 classes: no training

78 of 156 poor students got $$$

Short: 22 JHSs

36 classes: short training

47 classes – no training

144 poor students—no $$$

188 poor students—no $$$

4 poor students X 473 classes = 1892 students

Vouchers ($$$) + LONG OR SHORT Counseling Interventions

Page 38: Conducting Policy-Based Education Finance Research in China

Migrant JHS students in Beijing

• 200+ million rural migrants in China, many adults bring their children to the urban areas

• Household registration system restricts the educational options of these families/children

• We conducted RCTs to examine the effect of vouchers and education savings plans on student persistence and academic performance.

• Preliminary Results: Vouchers has some effect on reducing dropouts. Especially for students in poor, rural areas, less so for migrants in Beijing.

Page 39: Conducting Policy-Based Education Finance Research in China

(3) Assessing VET High School Quality• Nov., 2011: baseline survey of students in computer

application majors. Gave math and computer operation exams to students in ~110 VET high schools in 2 provinces.

• May, 2012: math and computer exams to the same students to assess the value-added of their programs.

• Collected other quality indicators from teachers, schools

Compare VET schoolsCompare VET and academic HSs

• After May, 2012: RCTs – training and incentives on how using data to improve student performance.

• May, 2013: Post-intervention math and computer exams

Page 40: Conducting Policy-Based Education Finance Research in China

Academic High Schools

Page 41: Conducting Policy-Based Education Finance Research in China

General Concerns

• Human capital formation

• Academic high school is a sort of bottleneck in the pathway to college who gets there? implications for equality

• Variation in academic high school quality may be great.

Page 42: Conducting Policy-Based Education Finance Research in China

Study in one NW province in China

1) Sorting/Inequality in Education from High School to College

2) The Effects of Attending Different Academic High Schools

3) The Impact of Building Free, Elite High Schools For Students From Disadvantaged Areas

Policymakers provided admin data for up to ten years– 6 years: HS entrance exam data for select counties– 10 years: college admissions data for all counties– HS expenditures and revenues (select schools)

Page 43: Conducting Policy-Based Education Finance Research in China

(1) Sorting/Inequality in the Province

Stage of Education poor area rural mi nori ty femal e age l ow scorer

HS Entry Exam Attendance ↓ ↓ ↑HSEE PerformanceHS AdmissionsElite HS AdmissionsDropouts by end of Junior YearDropouts by CEECEE PerformanceCollege Admissions %sKey College Admissions %s

Page 44: Conducting Policy-Based Education Finance Research in China

(2) High School Quality• How to evaluate school quality is a difficult question. Value-added models

are one common method. (We also tried regression discontinuity, but that’s another story…)

Why Value-Added?• Currently, China uses college entrance exam (CEE) scores or college entry

rates to judge the quality of high schools.

• But these are absolute “status” indicators and not relative “growth” indicators.

• Value-added scores are “growth” indicators which reflect the learning that students gain from the time of entering to the time of leaving high school more realistically reflect instructional quality.

Page 45: Conducting Policy-Based Education Finance Research in China

Analysis and Findings• We conducted student growth percentile SGP analysis on 50 high schools

using high school entrance and college entrance exam results.

Findings:

• The rankings of high schools change depending on whether you use “absolute” indicators or these “value-added” indicators.

• We also found that some students (poor, older, urban, non-minority, male, low scorers) tend to have lower SGP scores.

• Because we can see the value-added scores for each student, we can see which students need additional support.

Page 46: Conducting Policy-Based Education Finance Research in China

(3) Impact of Building Free, Elite High Schools For Students From Disadvantaged Areas

• Academic High School is expensive and selective.

• Policymakers used built two large, free, elite high schools (HSs) for students in disadvantaged areas.

• From 2003-2010: Spent ~ 150 million US dollars

Page 47: Conducting Policy-Based Education Finance Research in China

LPS (established in 2003; gradually expanded to 5084 students by 2009)

YC(established in 2006; gradually expanded to 6281 students by 2009)

Page 48: Conducting Policy-Based Education Finance Research in China

Request for Impact Evaluation

• Policymakers requested an impact evaluation.

• Questions: What were effects of the policy on disadvantaged areas’ students’:– college admissions (any college, first 2 tiers, elite)*– high school entrance exam (participation,

performance)**

Page 49: Conducting Policy-Based Education Finance Research in China

Quasi-experimental Methods

• Linear and Censored Quantile DID

• Short-interrupted time series (SITS) with comparison group design

• “Augmented” administrative data with Census data to account for censoring of observations

Page 50: Conducting Policy-Based Education Finance Research in China

Findings• The policy positively impacts students even before they get to

high school.

• The policy increases the likelihood that students from disadvantaged areas can attend college and selective colleges – equalizes opportunities across the province.

• Free, elite high schools are most effective when they provide opportunities to medium & medium-high scoring students (not just top students).

• high internal ROR for poor counties from the initiative government investment “recovered” after a few cohorts.

Page 51: Conducting Policy-Based Education Finance Research in China

(3) Higher Education (Financial Aid)

Page 52: Conducting Policy-Based Education Finance Research in China

Background

• In 1997, China’s government instituted a cost-sharing policy many poor students couldn’t pay.

• In 2007, the State Council increased aid a lot: 27.3 billion yuan, mostly for low-income students.

• Social organizations, local governments and universities also increased aid.

Page 53: Conducting Policy-Based Education Finance Research in China

Potential Problems in Allocating Financial Aid

• Difficult for the government and universities to assess students’ financial need lack of a universal income tax system.

• Each institution relies on information reported by students.

• In China, as well as in other developing countries, there is concern however that students may not report their information accurately.

• There is also no specific standard for how administrators at different institutions use this information to assess student need.

Page 54: Conducting Policy-Based Education Finance Research in China

Research Questions

(1) What is the current distribution of aid across the HE system?

(2) How is aid currently distributed by universities?(3) Is aid reaching students from households with

lower socioeconomic status (SES)? (4) Is aid given to students on characteristics

besides SES?(5) What is the bottom line (in terms of net costs

and subsidies) for students?

Page 55: Conducting Policy-Based Education Finance Research in China

Data

In 2008, we collected a 17% simple random sample of senior college students from one province who attended a four-year university in that province.

We had an extremely high response rate in general (about 98%).

We constructed special SES measures using various types of household information.

Page 56: Conducting Policy-Based Education Finance Research in China

(2) How well was aid distributed in each university to poor students?

• Government needs-based aid given more to low social class students within institutions.

• Some universities give university aid more to lower social class students...and some do not.

Page 57: Conducting Policy-Based Education Finance Research in China
Page 58: Conducting Policy-Based Education Finance Research in China
Page 59: Conducting Policy-Based Education Finance Research in China

Finally: RCT on the effects of providing college cost and fin aid information

Students, especially in disadvantaged areas may not have heard of the State policy on financial aid.

What is the effect of providing high school students with user-friendly college cost and financial aid information on their likelihood of receiving financial aid?

Page 60: Conducting Policy-Based Education Finance Research in China

Sample and Assignment•41 poor counties – went to the best high school in each county

•Randomly assigned 20 as “treatment” counties/schools

•Randomly chose one “science-track” class

•Science-track classes were given the intervention or treatment (T).

•Confirmed that T and C groups were balanced

GREEN = INTERVENTIONBLUE = CONTROL

Page 61: Conducting Policy-Based Education Finance Research in China

Intervention•Info booklet:

– Financial Aid – College Costs– Application Process– Hotline Numbers– Other Resources– Rights/Obligations

•20 minute presentation•3 to 4 minutes for Q&A•5 minute feedback form

Page 62: Conducting Policy-Based Education Finance Research in China

Results: Types of Financial Aid

Needs-Based Grants

Green Channel

Home-based Loans

National Loans

Poverty Subsidy

Treatment

1.36*(.24)

[.08]

2.13**(.73) [.03]

2.72** (.81) [.00]

.60 (.25) [.22]

.92 (.23) [.72]

GEE TREATMENT EFFECT ESTIMATES FOR VARIOUS FINANCIAL AID OUTCOMES (SCIENCE TRACK STUDENTS)(Without Covariate Adjustments, using non-Imputed Data)

Notes: 1) Effects reported as odd-ratios, robust standard errors in parentheses, p values in brackets 2) **significant at the 5% level; *significant at the 10% level. 3) N = 2331.

Page 63: Conducting Policy-Based Education Finance Research in China

Conclusions about Policy-Related Research Work

• Much of our work is empirical so far:– Descriptive– Impact Evaluation using RCTs, quasi-experimental methods

Future work:• Often look at local level – need more representative data for the country as

a whole or from several provinces.

• Discuss with policymakers the possibilities of implementing pilot RCTs.

• Strengthening reporting and collection of administrative data.

• Continue to find out why things work or don’t work in education.

Page 64: Conducting Policy-Based Education Finance Research in China

Thank you!