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The Impact of Rural Migrant Urbanization on Local Government Fiscal Allocation and Spending in Science and Technology and Education: Evidence from City Panel Data
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The Impact of Rural Migrant Urbanization on Local Government Fiscal Allocation and Spending in Science and Technology and Education: Evidence from City Panel Data
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Journal Article
The Impact of Rural Migrant Urbanization on Local Government Fiscal Allocation and Spending in Science and Technology and Education: Evidence from City Panel Data
2025
Overview
This paper leverages the Opinions of the State Council on Further Promoting the Reform of the Household Registration System as a quasi-natural experiment to examine the impact of rural migrant urbanization on local government expenditures in science and technology(S&T) and education.Employing a generalized difference-in-differences(generalized-DID) approach and panel data from 271 Chinese prefecture-level and above-level cities spanning 2003-2019, we find that household registration reform driven by this urbanization process significantly increased the absolute level as well as the fiscal share of S&T and education spending.Mechanism analyses indicate that rural migrant urbanization promotes these expenditures through two channels: increasing the overall local fiscal revenue and encouraging a greater proportion of the fiscal resources to be allocated to these sectors.The findings uncover the current evolving trends in fiscal resource allocation due to rural migrant urbanization and provide empirical evidence for optimizing the provision of public services and enhancing the potential of long-term economic development.
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