Does inequality in educational attainment matter for China's economic growth?

Using panel cointegration techniques, this paper empirically estimates the long-run effect of inequality in educational attainment on economic growth during the period 1990-2010 in China. We identify a robust non-linear nexus between inequality in educational attainment and economic growth in Chinese provinces and find evidence pointing to differing effects of inequality in educational attainment on growth depending on the level of economic development of an area. Specifically, our results show that the inequality is more relevant for economic performance than educational attainment in the economically less developed Western region. Thus, given limited social resources for education investment, education policies that create more equal distribution of educational resources will promote higher growth, especially in less developed areas.