The Financial Times has a series of articles this week about China’s rural migrant workers; the general theme seems to be that the fact that a very large number of people have successfully transitioned from backbreaking low-paying farmwork to higher-paying industrial and service jobs is a big problem for China. To me that seems like a rather strange angle to take. Sure, once a lot of people have made this transition it means fewer will make it in the future, but that’s a sign of success not failure.
A more relevant question to ask is probably: once rural migrants have made the transition to the urban economy, how well-equipped are they to keep raising their incomes? Migrants get a big one-time gain in incomes just from going from the rural sector to the urban sector, but how do they do once they’re in the urban sector? A recent paper by the great development economist Scott Rozelle and a number of co-authors tackles this question by taking a close look at the educational level of Chinese workers. Scott has written more papers about Chinese agriculture than I can count, but over the last few years his focus has really been on rural education issues, and he has bent my ear about this every time I have seen him. The new paper documents more formally what Scott has been saying in talks and presentations for a while: China does not in fact have a very well-educated workforce, primarily because of problems in rural education.
Below are the data they calculate from the Chinese census, with comparative figures from the OECD:
The census data show much lower levels of educational attainment than the Ministry of Education’s figures, which claim very high enrollment rates. Some studies have shown far fewer rural students are completing secondary education than officially reported. The reasons why rural students are dropping out of school is not extensively discussed in this paper (there is more detail here). One factor that Scott has highlighted before is the very strong gains in migrant wages in recent years, which have made it more attractive for kids to start work early without completing school. It is also the case that the children of rural-to-urban migrants often fall into an administrative limbo between their home area and where their parents work, limiting their educational opportunities.
Why is the lagging education of rural kids a potential economic problem? Because they are the workforce of the future, and the future will need more highly-educated workers. To quote from the paper:
Wages are rising and low-wage manufacturing is moving out. China is already making plans to become an economy that will be based on higher value-added, high-wage industries. This will mean, of course, that there will be a high demand for skilled labor. International experience demonstrates that individuals will need to have to have acquired skills taught at the level of high school or above if they hope to be competitive in these higher value-added industries. If China fails to endow its labor force with such skills, not only will many individuals have a difficult time finding employment, the newly emerging industries may also falter from a short supply of skilled labor. The whole economy may experience slower development.