Abstract
The relationship between human capital development and urbanization in the People’s Republic of China (PRC) is explored, highlighting the institutional factors of the hukou system and decentralized fiscal system. Educated workers disproportionately reside in urban areas and in large cities, and the returns to education are significantly higher in urban areas relative to those in rural areas, and in large, educated cities relative to small, less-educated cities. In addition, the external returns to education in urban areas are at least comparable to the magnitude of private returns. Rural areas are the major reservoir for urban population growth, and the more educated have a higher chance of moving to cities and obtaining urban hukou. Relaxing the hukou restriction, increasing education levels of rural residents, providing training for rural–urban migrants, and guaranteeing equal opportunity for all residents are necessary for a sustainable urbanization process in the PRC. In terms of health, rural–urban migration is selective in that healthy rural residents choose to migrate. Occupational choices and living conditions are detrimental to migrants’ health, however. While migration has a positive effect on migrant children, its effect on “left-behind” children is unclear.
Highlights
Human capital, which plays an essential role in economic development and the urbanization process, refers to the knowledge, skills, and strength accumulated by an individual to enhance his or her productivity
In developing countries like the People’s Republic of China (PRC), human capital facilitates the process of population shifts from rural to urban areas, and the interaction between human capital development and urbanization is influenced by institutional arrangements and government policies
This study examines how attainment of education performs in the urbanization process in the PRC, by noting changes in education levels for rural and urban areas and for different provinces and/or cities
Summary
Human capital, which plays an essential role in economic development and the urbanization process, refers to the knowledge, skills, and strength accumulated by an individual to enhance his or her productivity. This study examines how attainment of education performs in the urbanization process in the PRC, by noting changes in education levels for rural and urban areas and for different provinces and/or cities. The institutional background of the relationship between human capital and institutions is analyzed, such as the role played by governments at various levels in allocating educational resources as well as that of the hukou system in determining migrants’ access to education and health care. Educational attainment is discussed in the context of rapid urbanization, especially regarding developments in rural and urban PRC and across different regions Health issues and their relationship with urbanization, which certainly impact human capital development, are analyzed, while policy implications are discussed in the last section. Significant external returns to education exist in urban areas, and rural–urban migration is positively selected in terms of human capital levels
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