Human Capital Destruction and Economic Performance: Quasi-Experimental Evidence From China's Cultural Revolution
CitationLim, Jamus. 2018. Human Capital Destruction and Economic Performance: Quasi-Experimental Evidence From China's Cultural Revolution. Master's thesis, Harvard Extension School.
AbstractThis thesis examines the effect that human capital exerts on per worker income, using China's Cultural Revolution as a natural experiment. The decade-long Revolution resulted in severe political persecution of millions among the educated class, and disrupted the schooling of millions more. I exploit cross-provincial variation in political casualties to identify the causal effect of lost human capital on incomes, using both two- and three-stage least squares estimators. My baseline estimates suggest that a one percent decline in human capital accumulation results in income reductions in the order of around 7 percent, which rises as the Revolution progresses, before diminishing in the later years. The finding remains robust to a host of robustness checks, including using alternative variable measures, additional controls, changes to the instrument set, the use of growth rather than levels, and falsification exercises. I also find some evidence that the human capital effect is transmitted more at the secondary and tertiary (rather than primary) levels, and on manufacturing and services, rather than agriculture.
Citable link to this pagehttps://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37365365