Inclusive Economic Growth from Institutional Transition of Educational Centralization: Panel Data Evidence in China’s History Since 1978 to 2008

Abstract

Partly because interregional divergence for several decades in China had been concluded, Chinese development path is always criticized by many western scholars. However, this paper argues for an actual convergence in evidence of new data set with explanation from its provincial initially average income, institutional transition of education, and booming labor mobility, etc. as explanatory variables. Interregional GDP per worker satisfies β -convergence on condition that domestic in- and out-migrations are included in denominators, when the quickly-accumulated and spatially-equalized human capital is decisive to the convergence and growth. The preferential economic policies for the first-open coastal line even inversely accelerate the convergence process nationwide because of huge in- and out-migration. The central government initially “giving priority to efficiency” seemed to abandon spatial fairness, but it ultimately le a d s to the best ending of embodying inclusivity for employment with quick economic growth in the long run. The path of socialism with Chinese characteristics for development is highly positive in the field of pushing inclusive growth miracle .