Unexpected pressure? The effect of a curriculum reform on household educational investments and student outcomes

Abstract

High returns to college lead to intense competition among high-school students for places at elite universities. In this paper, I study an unanticipated effect of a high-school curriculum reform in China in the 2000s. In this context, students in the last cohort under the old curriculum were faced with an unexpectedly increased pressure associated with higher costs of retaking the College Entrance Exam due to the curriculum switch; I confirm this pattern by demonstrating a sharply declining number of exam retakers in the year when the curriculum was changed. I then study the impact of this increased cost and the associated higher pressure on household educational investments as well as long-run outcomes of students. The empirical results show that households with students exposed to a higher cost of retaking the exam invested more in children’s education for a better chance on their first sitting. Further evidence indicates that being in the last cohort under the old curriculum reduced students’ subjective wellbeing and led to more pessimism in the long run.