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Impact of Public Education and Regional Economic Growth in China: A Shadow-Price Perspective

School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China
School of Economics and Commerce, South China University of Technology, Guangzhou 510006, China
Lithuanian Institute of Agrarian Economics, Vilnius 03105, Lithuania
Author to whom correspondence should be addressed.
Sustainability 2017, 9(8), 1333;
Received: 19 June 2017 / Revised: 22 July 2017 / Accepted: 25 July 2017 / Published: 30 July 2017
(This article belongs to the Section Sustainable Education and Approaches)
PDF [910 KB, uploaded 30 July 2017]


Education development is a critical component for a modern economy as the illiteracy rate can hinder economic growth. The illiteracy rate in China has decreased rapidly since 1980s, but there still exists an imbalance in distribution of educational resources among different regions. In order to explore the impacts of education quality on regional economic growth, we employ a quadratic directional distance function to derive the shadow prices of illiteracy for 31 provinces in China. In this case, shadow price is interpreted as the opportunity cost of reducing the illiteracy rate. The results show that the highest shadow price of illiteracy is observed in the middle region. Looking at individual provinces, Zhejiang shows the lowest shadow price of illiteracy, whereas Shanxi features the highest one. The shadow price of illiteracy showed a downward trend in the eastern region, while increasing trends were observed for the middle and the western regions during 2005–2011. Moreover, the gap between the eastern region on the one side and the middle and the western regions on the other side has been increasing. View Full-Text
Keywords: illiteracy rate; shadow price; public education; economic growth illiteracy rate; shadow price; public education; economic growth

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Yu, Z.; Zhu, N.; Baležentis, T. Impact of Public Education and Regional Economic Growth in China: A Shadow-Price Perspective. Sustainability 2017, 9, 1333.

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