Solution or isolation: Is boarding school a good solution for left-behind children in rural China?

In recent decades, rural China has experienced a rapid increase in boarding school enrollment rates and in the population of left-behind children (LBC) (i.e., rural children whose parents migrate to urban areas for work). LBC tend to be worse off in numerous dimensions. At 61 million, China has the world's largest population of LBC. As it provides a different residential environment, boarding school can potentially exacerbate or mitigate the negative effects of parental migration. Using nationally representative data on Chinese families, we estimate the impact of parental migration and boarding school on child outcomes in cognition and physical and mental health. We find that while boarding school has no effect on LBC physical and mental health, it substantially improves performance on achievement tests for both LBC and non-LBC. Policies aimed at improving boarding school conditions in China, may improve not only cognitive outcomes, but also child physical and mental well-being.     

Does school shutdown increase inequality in academic performance? Evidence from COVID-19 pandemic in China

The school shutdown due to the global pandemic of coronavirus disease 2019 (COVID-19) can lead to an increase in educational inequality through disproportionately affecting disadvantaged children. We use data from a unique survey of 7202 junior high school students and their parents from Shaanxi province to explore whether the school shutdown enlarged the educational gap between students with different parental socioeconomic statuses (SES) during the pandemic. We find that students with more highly educated parents experienced an increase in relative test rankings after the shutdown period. A 1-year increase in parents' education led to a relative 0.18-percentile increase in students' rankings of total test scores. We also identify the mechanisms behind the enlarged gap by means of heterogeneity analyses. We show that parents' education mainly affected children's academic performance through parents' engagement in their children's homeschooling, mitigating the negative impacts of Internet addiction on students, and serving as substitutes for teachers who were unable to teach well online.     

Is downsizing a good strategy during the downturn? Evidence from Taiwanese manufacturing firms

In response to a crisis, while retrenchments are considered to be an important part of a firm’s long-term recovery, research has indicated that downsizing strategies, reducing employment and shrinking the R&D budget, may lead to an erosion of a firm’s valuable core competence. Drawing from the literature of organizational turnaround strategies, this study advances the downsizing research by explaining how downsizing strategies affect a firm’s long-term performance. Using a uniquely compiled dataset of 2559 Taiwanese manufacturing firms, our research shows that increasing labor employment during a financial crisis can significantly improve a firm’s long-term total factor productivity and sales. In other words, employment downsizing may not be the best solution when encountering an economic downturn.     

Does religion enhance firm performance? Evidence from private firms in China

We study the impact of religiosity on firm performance in China. We find that entrepreneurs with religious beliefs have higher accounting performance. Firms are more likely to obtain bank credit if entrepreneurs have religious beliefs as religiosity stimulate them to invest more in networking, which further enhance the access to bank credit. Religious entrepreneurs have more trust towards external people, which incentivizes them to adopt a shareholding reform and employ external professional CEOs instead of family members, and thus enhances the corporate governance of these firms. In contrast, religious entrepreneurs also prefer family members as shareholders and inheritance of the firm by family members. The preference of inheritance of the firm by family members undermines the enhancing effect of external CEOs on firm performance. Religious entrepreneurs are more likely to spend more on safety insurance for employees, which is driven by the altruism originated from religious doctrines and also the risk aversion channel. The impact of religiosity complements market institutions, and political and social status of the entrepreneurs, which shows the interaction between religion and formal market institutions. We find that it's mainly Buddhism that drives our results, while other religions have limited impact on business activities in the country.     

Does religion belief matter to self-employment of rural elderly? Evidence from China

There is a growing interest in understanding the economic consequences of religious belief. Using a unique dataset collected from thousands of villages, this research investigates the effect of religious beliefs on rural elderlies’ self-employment choice in China. The empirical results show that, self-employment is positively associated with religious beliefs after controlling for village characteristics, which implying that religion plays a significantly positive role in promoting self-employment of rural elderly. We also find that, the self-employment promoting effects are more significant in Christians and Buddhists. This result is consistent and robust after using instrumental variable approach, propensity score matching approach and controlling for the alternative hypothesis variables. Furthermore, elderly religious believers who are female, over 70 years old, living in a village where the secondary industry is dominant and soybeans/potatoes the main crops are more likely to became self-employees. Mechanism analysis shows economic rationality rather than value rationality that religious belief influence self-employment which confirms economic compensation channel. Given the few studies and limited dataset resources in the context of rural revitalization in China, this paper put effort to provides new evidences of the relationship between religious belief and self-employment.     

Do peer effects influence the academic performance of rural students at private migrant schools in China?

This paper examines peer effects on the academic performance of rural migrant students at both the class level and the individual level. The dataset is from a survey of more than 3000 students from all of the 87 migrant schools in Shanghai and Suzhou, China. The two-stage least squares method with an instrumental variable is employed to control for the endogeneity of peer performance variables. We found that peer effects exist among the migrant students at both class and individual levels. A one-point increase in the average of standardized math grade (SMG) of his/her classmates is associated with an increase of 0.5 points in the SMG of an individual (1.01 standard deviation). A one-point increase in a learning companion's SMG can result in an increase of 0.046 points in the student's SMG. The findings reveal that private migrant schools can improve rural migrant students' academic performance by optimizing students' class allocation and building study groups, providing an additional boost to the input-output efficiency of the human-capital education of the children of migrant workers in China, but the effects of these measures are limited.     

Educational Investment for Future Marriage? Evidence of Missing Girls from China

Numerous studies have shown that a sex ratio imbalance (more boys than girls in a society) may result in a sequence of social problems. This study investigated the expected effect of a high sex ratio on educational investment. Using nationally representative data from the China Family Panel Studies and the 2010 Census, we determined the following: (i) a high sex ratio increased educational expenditure for boys relative to girls; (ii) parents who took education seriously and who cared about their children's education were more likely to invest in education to appear attractive in the future marriage market, and (iii) the profound impact of a high sex ratio on educational expenditure was more pronounced in less educated and poorer families. Our findings raised the possibility that the effect of the sex ratio may bring about more gender inequality in the future. The implicit cost of a high sex ratio may further lead to a vicious cycle of family fertility and childbearing.     

Does winning a venture competition encourage entrepreneurial exploration? Evidence from China

This paper examines whether winning venture competition spurs entrepreneurs to carry out entrepreneurial exploration. We use data from new venture competitions organized by Shanghai municipal government that are open to innovative small ventures. Using a regression discontinuity design, we show that winning leads to a higher level of entrepreneurial explorations in the year following the competition. However, this effect is reduced for female entrepreneurs, and entrepreneurs whose affiliated ventures have a shorter time of operation. Our findings are consistent with existing theories about entrepreneurship and behavioral economics, including entrepreneurial experimentation and “house money” effect.     

Can grain subsidies impede rural–urban migration in hinterland China? Evidence from field surveys

In this paper I examine if China's grain subsidy program keeps farmers from engaging in migratory work using self-collected panel rural household survey data from Zhijiang, Hubei province. Making use of Zhijiang's unique geographical features, I construct a treatment and a control group and use a difference-in-differences methodology to identify the subsidy effect on migration. My results suggest that the grain subsidy policy does keep farmers at the rural origin.     

Are poor able to access the informal credit market? Evidence from rural households in China

The poor are often excluded from formal credit markets, but few empirical studies in literature have investigated whether the poor are constrained in the informal credit market. This paper uses recent micro data of rural China to answer this question. An instrumental variable model is estimated to account for potential endogeneity issues. Results show that poorer households have lower probability of entering the informal credit market. Further examination shows that the poor are limited by social network and that they have no financial means to invest in their social capital to expand their social network. Our findings shed light on potential solutions of reducing poverty in rural areas.     

Can public policies lower religiosity? Evidence from school choice in France, 1878–1902

This study analyses the effects of public policies on religiosity by focusing on the enrolment of pupils in French Catholic primary schools between 1878 and 1902. During this period, the government increased public spending and made school attendance free and mandatory until the age of 13. The empirical analysis presented here suggests that greater public spending had no substantial effect on the enrolment in Catholic schools. By contrast, mandatory schooling laws had a negative, but quantitatively limited, impact. The overall resilience of Catholic schooling is traced to the political divide created by the 1789 French Revolution.     

Is care by grandparents or parents better for children's non-cognitive skills? Evidence on locus of control from China

This study investigates the effect of grandparental involvement in childcare on children's locus of control (LOC), which is an important non-cognitive skill that affects children's future development. We use data from the China Family Panel Studies, which is a nationally representative survey, and employ instrumental variables to address the endogeneity of family childcare choice. We find that children with grandparental care have more external LOC than children in the sole care of their parents do; that is, they are more likely to attribute individual success to external factors, such as luck, fate, and family background. This finding is robust to different measures of grandparental involvement in childcare and different model specifications, as well as a minor violation of the exclusion restriction of the instruments. We further examine the potential mechanisms underlying this effect. Grandparents have more external LOC than parents do, which can affect children's LOC through intergenerational transmission of LOC. Their parenting attitudes and styles are also different from parents' in that grandparents take less responsibility for children's academic performance than parents do and are less strict with children. In addition, grandparental care induces adverse effects on children's family environment.     

Is public spending behavior important for Chinese official promotion? Evidence from city-level

This paper aims to examine the effect of public expenditure on local officials' promotion. The main objectives of this study are as follows. Firstly, we seek to discuss if the expansion of public spending will contribute to local official promotion. Secondly, we analyze, if the positive effect is possible, how is the influence of expenditure structure on official promotion; for example, what is the different between the effect of productive expenditure and welfare expenditure. Finally, we also examine the hysteresis effect of local official promotion. The panel data from 284 Chinese cities for the period of 1990–2016 are estimated using the probit model. The major findings are the following: (1) fiscal gap will positively affect officials' promotion; and (2) basic construction expenditure and official's promotion is positively correlated; however, (3) education expenditure's effect on officials' promotion is negative; and (4) real estate investment improve officials' position in the promotion championship; and finally, (5) in the early stage of official change, public expenditure and investment will statistically significant than the latter stage.     

Is there a link between homeownership and unemployment? Evidence from German regional data

Using German regional data for 1998, 2002 and 2006, this study examines the Oswald hypothesis, the conjecture that high levels of homeownership are linked to inferior outcomes in the labor market. Applying a set of control variables, three different econometric models are specified and estimated: a cross-sectional model, a pooled data model, and a model taking into account unobserved regional heterogeneity. Once unobserved regional effects are accounted for, the findings are consistent with Oswald’s hypothesis. The economic significance of the relationship is at best marginal, however.     

Do Analysts Matter for Corporate Tax Planning? Evidence from a Natural Experiment

We exploit an exogenous shock to analyst coverage as a result of brokerage house mergers and closures to examine whether financial analysts influence the tax‐planning activities of the firms they cover. Using a difference‐in‐differences design, we find that, on average, firms affected by broker mergers and/or closures experience a reduction in their GAAP (cash) effective tax rates (ETR) of 2.5 percent (2.6 percent), relative to control firms, translating into average tax expense (cash tax) savings of $34 ($35) million. The treatment effect is more pronounced among firms with lower pre‐event analyst coverage. To explore how analysts affect tax planning, we further document that the treatment effect is greater among firms that lose an analyst who provided an implied ETR forecast in the past, suggesting that analysts influence tax planning via their tax‐specific research efforts. In addition, we find that after merger/closure, weakly governed firms increase their use of aggressive tax strategies, and financially distressed firms experience a larger reduction of cash effective tax rates, relative to control firms. Overall, we provide evidence that a shock to analyst coverage sufficiently changes the cost‐benefit trade‐off of tax planning.     

Do men and women discriminate against women for the same reason? Evidence from China

In this study, we examine whether men and women form gender discrimination for the same reason. To do that, we build an experimental Chinese labor market in which employers evaluate the productivity of workers who perform a real-effort task. Before evaluation, the employer observes the worker’s personal and group information. The personal information contains gender identity and a signal of productivity. The group information reveals the productivity distributions of some other male and female workers who do not differ in average productivity. However, it shows more male workers at the very top productivity levels and more female workers at the very bottom productivity levels in one treatment than in the other. According to the belief-based theory, there will be a greater degree of discrimination against female workers in the former. We find that, however, only male employers’ evaluations are well predicted by this approach. Female employers behave oppositely: their degree of gender discrimination is smaller in the treatment emphasizing men’s advantage in the tails of the productivity distributions. To explain female employers’ evaluations, we adopt the preference-based approach. Our findings suggest that employers of different genders can have different motivations for gender discrimination, and thus call attention to the theoretical foundation of gender discrimination and policy measures aimed at reducing gender discrimination.     

Is income a good welfare indicator for Spanish households? A comparison between both distributions

This paper compares the income and welfare distributions of Spanish households, with the objective of determining whether the first is a good indicator of the second. We consider different inequality measures of both adjusted income and welfare. The results show that the income ranking does not represent the welfare ranking of households and, secondly, that monetary inequality is higher than welfare inequality, which gives support to the idea that leisure time has a compensating effect on household welfare.     

How does housing wealth affect household consumption? Evidence from macro-data with special implications for China

Thanks to four-decade spectacular economic growth, China's households have been accumulating a stockpile of wealth. In such a context, further concerns have been raised about the relationship between wealth accumulation and improvement of economic well-being, mainly through consumption. The issue becomes even more important when considering the challenges facing China in recent years, which can be characterized by a mix of increasingly leveraged households, escalating housing price, sluggish consumption, slowing economic expansion, trade frictions with the United States, and the Covid-19 pandemic and resulting economic difficulties. With that background in mind, this paper first provides international evidence on the relationship between household consumption and wealth, especially in the form of houses. Drawing on a panel of aggregate data for fourteen countries including China, we find that household consumption positively responds to changes in housing wealth, and this link is further affected by different levels of government spending and financial development. We next relate the international evidence to the case of China, with the focus on some recent policy issues over housing regulations and consumption promotion. Importantly, as the evidence and underlying theories suggest, housing wealth-consumption association does not follow a simplistic pattern, and thus, multiple policy measures could and should be undertaken rather than merely curbing speculative activities in real estate exchanges and associated financial business.