Public education investment and agricultural structural transformation: evidence from prefecture-level cities in China's grain-producing provinces
Year: 2026
Type: article
Abstract: The decline of agriculture's relative output weight as non-farm sectors expand is a defining regularity of development, yet its local public-investment correlates within a single economy remain unclear. This study relates local public education-investment intensity—annual education expenditure over city gross domestic product (GDP), a spending flow rather than a human-capital stock—to agricultural structural transformation in 172 prefecture-level cities across China's 13 major grain-producing provinces, using two-way fixed-effects models that compare each city with itself over time. The primary-sector output share is the direct measure of intersectoral composition (3,249 city-year observations, 2005–2023); primary value added per registered resident is a complementary scale outcome that avoids the shared GDP denominator (3,080 observations, 2005–2022). On the share margin the association is negative in the reference specification but not robust, changing sign when city-specific trends and lagged controls are imposed jointly. On the scale margin it is negative in every control set examined, including lagged controls and city trends, and placebo fiscal ratios do not reproduce it; it is nevertheless indistinguishable from zero under province-by-year fixed effects and 13-province few-cluster inference. The three sector-share estimates form an accounting decomposition whose receiving-sector sign reverses across specifications, so no services-led claim is made. All estimates are conditional within-city associations, not causal effects. For grain-producing regions, they motivate coordinating education budgets with agricultural productivity and capacity safeguards rather than reading a falling primary-sector share as modernization.
Authors: Kewen Hou, Xiuzhi Wang
Institution: Nanchang Hangkong University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,353
OpenAlex ID: W7214101078