Whether increases in school inputs lead to better education outcomes is essential for education policy-making. While empirical studies that aim to estimate this causal relationship abound, a consensus is lacking. One confounding factor that has mostly been ignored in the literature is the behavioral response of households to changes in public education policies by varying their own education inputs. This paper studies how increases in government spending on public schools affect household education spending in urban China. We use detailed information about household spending on public school tuition, textbooks, and private tutoring from the 2002-2006 Urban Household Survey data and focus on households with children in compulsory education (Grades 1-9). We provide evidence that municipal public education spending in China is exogenous to household preferences, and this allows us to identify a causal relationship. In a model controlling for city fixed effects, year-province fixed effects, local per capita GDP and growth rate of number of basic education students, and a wide range of household characteristics, we find that increases in public education spending lead to significant decreases in household spending on public school tuition and private tutoring but no change in spending on textbooks. In addition, while the reduction in household spending on tuition is quite homogeneous across income quintiles, the reduction in household spending on private tutoring comes primarily from the lowest income households, suggesting diverse educational demand. Moreover, the impact on private tutoring spending differs for metropolitan areas and smaller cities.

北京大学经济学院财政学系副教授，她于1989年保送中国人民大学国民经济管理系就读，分别于1993年和1997年获得经济学学士和硕士学位。1993-1994年期间，在“福特基金会”资助下的“中美经济学培训中心”学习。2003年1月从北京大学光华管理学院获得博士学位。并在2003-2004年获国家留学基金的资助，在加州大学Berkeley分校访问进修。研究兴趣和领域主要包括：应用计量经济学、福利政策评价、教育财政学，并在《经济研究》、《经济学季刊》、《经济科学》、《统计研究》、《数量经济与技术经济研究》等学术刊物上发表论文多篇。