Place-based policies and local human capital accumulation: Evidence from China's special economic zone program

Abstract

This paper examines the effects of a prominent place-based policies in China, special economic zones (SEZs), on human capital accumulation. Using a cohort difference-in-differences (DID) analysis and population census data, we find that exposure to the SEZ program led to an average increase of 0.14 years of education. Further investigation reveals that increases in educational expenses and inflow of highly educated talent are important factors in human capital improvement. We also find that the effects are only significant for females and senior high school education.