Education and poverty in rural China

We analyze household and school survey data from poor counties in six Chinese provinces to examine the effects of poverty, intra-household decision-making, and school quality on educational investments (enrollment decisions) and learning outcomes (test scores and grade promotion). Unlike previous studies, we use direct measures of credit limits and women's empowerment. Drawing a distinction between the effects of wealth (measured by expenditures per capita) and credit constraints, we find that the former improves learning while the latter reduces educational investments. We find evidence of a story of gender bias in which academically weak girls are more likely to drop out in primary school while most boys continue on to junior secondary school. Women's empowerment reduces the likelihood of dropping out but does not affect other outcomes. Finally, our measures of school quality have some effect on the duration of primary school enrollment but not on learning.