Education Funding Allocation, Compulsory Education Provision in Destination Areas, and Children's Migration with Their Parents: Evidence from the Reform of the Urban Compulsory Education Funding Guarantee Mechanism

Ensuring that migrant children have equal access to compulsory education in destination areas is an important manifestation of educational equity and is closely related to the division of expenditure responsibilities for compulsory education across levels of government and the allocation of subsidy funds. Drawing on the reform of the urban compulsory education funding guarantee mechanism implemented in 2016 and data from the 2011–2018 Migrant Population Surveys, this paper identifies the effect of improving the central government's allocation of funding for urban compulsory education on whether the children of rural migrants accompany their parents. The findings are as follows. First, the reform significantly increased the probability that migrants' children would accompany their parents. Second, the policy had larger effects on children whose parents had lower levels of education, on girls, and on younger school-age children, and its effects were more pronounced in cities with higher migrant population shares and greater degrees of fiscal decentralization, indicating that the policy helps promote equity in educational opportunities across social groups and between genders. Third, the mechanism works as follows: the reform clarified the division of expenditure responsibilities for urban compulsory education between the central and local governments and optimized the allocation of central subsidy funds, thereby incentivizing destination areas to increase education spending, lower barriers to nonlocal enrollment in compulsory education, and expand enrollment capacity, thus improving migrant children's opportunities to receive compulsory education in destination areas. Further analysis shows that as the probability of children accompanying their parents increased, migrants' intentions to reside in destination cities over the long term also rose significantly, and urban labor supply improved. This paper provides empirical evidence and policy implications for rationalizing the division of compulsory education expenditure responsibilities between the central and local governments, improving the central government's transfer payment and subsidy mechanism, advancing educational equity, and safeguarding urban labor supply.