School Entry Age and Educational Attainment: using 1986 Compulsory

Education Law as Natural Experiment

Abstract: Using CFPS 2010 data, I investigate the causal relationship between school entry

age and education. The 1986 Compulsory Education Law sets a legal school entry age using

31st August as cutoff date. As a result, children born in the last four months of one year are

older than their counterparts upon school enrollment. Employing birth month variation

together with policy shock as IV, I find that early enrollment by one year roughly increases

schooling by two years. Even though the IV only works for males not for females. This

finding has passed the robustness check using 2005 Mini Census Data with diminishing

impact. Further explorations reveal that school entry age is irrelevant to cognitive skills, but

has larger influence in areas with higher out-migration rate. These results invalidate the

competence theory and lends support to opportunity cost theory, that early birds accomplish

more schooling not due to advantage in academic performance but because of smaller

opportunity cost for further study.

Key words: Compulsory Education Law, school entry age, birth month, years of schooling

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1. Introduction

Over a long time and across numerous countries, the relationship between school entry

age and later outcomes has become a heated topic to many people’s concern. Interestingly, the

old saying “Early birds catch the worm” does not hold in the US or European countries. Both

economists and psychologists document a positive correlation between age at school entry

and school performance, years of schooling and income, etc., indicating that later-enrolled

children benefit from developmental maturity and even small difference can last into

adulthood and make a huge impact (Heckman, 2006; Bedard and Dhuey, 2006).

Stories in China, however, is more complicated and points to an opposite direction. The

criterion of school entry used to be vague and uneven among provinces, for example, the

Statistical Bureau roughly used the interval 7-11 years old for enrollment rate calculation

before 1991. It was in 1986 for the first time the Compulsory Education Law reduced school

entry criteria to age six on a national scale, aiming to guarantee enough study time before

work. Only three decades passed, impact of the attendance policy is huge and even goes too

far. Today’s parents are eager to send children to school as early as possible. They even push

the government to abolish constraint on school entry age so that their kids can “fly” even

earlier. It is very hard to trace when was this practice formed and how was it formed, but it

must be driven by the belief that early enrolled children perform better than later ones.

Based on the discussion above, we cannot help but to ask does school entry age really

influence educational outcomes? Is that possible that early birds catch the worms not because

they start early, but instead because they are more endowed in nature or they have more

ambitious parents or their families have more social network? My paper intends to address the
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endogeneity problem and explore the causal relationship. What’s more, I aim to reveal the

deep mechanisms lying behind the relationship. Scholars have concluded two ways that may

relate school entry age and educational attainment together. On the one hand, school entry age

have positive influence on skill formation. Within the same class, older students enjoy

maturity in both cognitive and non-cognitive development. On the other hand, extra schooling

is more costly for later-enrolled students because they are older at graduation given the same

amount of schooling. These two channels have opposite impact and what I capture in this

paper is the mixed effect.

Thus my research question can be simplified as:

(1) What’s the causal relationship between school entry age and attained education?

(2) What’s the underlying mechanism behind the relationship?

To answer these two questions, I employ 1970-1989 birth cohort data from CFPS 2010

and make use of Attendance Policy as instrumental variables. The 1986 Compulsory

Education Law provides an ideal natural experiment to study this issue, since when children

are required to enter school at 6 years old (cutoff date is 31st August) and to complete nine-

year compulsory education. When graduating from middle school, they theoretically have

equal amount of human capital but only differs in age. It’s of great interest to examine

whether the variation of school entry age affect their decision of going to high school and

final education years. Regression results imply that the interaction term between After8 (born

after August) and Treatment (influenced by the Attendance Policy) is only a valid IV for

males’ school entry age but not applicable to females. It’s estimated that birth after August

and after the Attendance Policy as well can postpone boys’ school enrollment by 0.217 years,
3
and one-year delay will result in around 2-year loss in educational attainment. Robustness

check using the 2005 Mini Census Data lends support to this conclusion but school entry age

has a much smaller impact.

In order to decide between the two competing mechanisms, I firstly examine the impact

of school entry age on cognitive skills. After instrumenting school entry age with the same,

exogenous variation in timing to begin school demonstrates insignificant impact on either

word test scores or math test scores. Then I combine prefecture migration data to measure

opportunity cost. The negative effect of school entry age is larger in prefectures with higher

out-migration rate. These results lend support to the opportunity cost theory that early birds

catch the worm not because they are advantageous in cognitive development but because they

are younger by completion of one stage and have smaller cost for further education.

My research is promising for two reasons. Firstly, this paper is going to fill up the

research gap in China. Eastern-and-western difference in culture and education has always

been a meaningful topic. As far as I know, my research is the first one to address their

relationship in China’s environment and to use birth month as instrumental variables;

Secondly, my research can contribute to the study of the Compulsory Education Law.

The Compulsory Education Law has been implemented for nearly thirty years. Recently there

have been several papers studying its prominent effect in enhancing Chinese people’s

education. However, little has been done to understand how the enhancement is taken place as

well as the divergence emerged along with the enhancement.

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 The remaining of this paper is organized as follows. The second section briefly reviews

empirical evidence from home and abroad. Data and methodology are illustrated in Section 3.

Section 4 reports results from IV estimation and robustness check. Mechanism discussion is

placed in Section 5. The last section concludes.

2. Literature Review

2.1 Causal relationship between school entry age and schooling

The relationship between school entry age and educational outcomes is not unfamiliar to

scholars, but their research either concluded from small samples or failed to address

endogeneity problem. The pronounced work by Angrist and Krueger (1992) was the first one

to instrument endogenous variation in age at school entry using birth season. Since the

compulsory school attendance law in the US requires children to attend school until their 16th

birthday, children born in late quarters begin earlier but can drop out at the same age, thereby

obtaining more schooling given the dropout rate is constant across birth season. Making use

of the existing rule, their work indeed found that about 7% to 12% percent of students are

constraint to school by the attendance law. But their work is criticized by a bunch of follow-

ups for neglecting other mechanisms that may bridge birth month to educational attainment.

In a critique paper by Bound and Jaeger (2000), they re-examined the association between

birth season and education using samples that are either exempt from the compulsory school

attendance law or collected in more recent cohorts. They observe a negative effect of winter-

birth on employment for predating cohorts and a much weaker effect for recent cohorts.

Apparently the compulsory attendance law is no longer the sole explanation and the validity

of birth season as IV is put into doubt. In the end, they also offers alternative factors that are
5
associated with birth season and may contribute to education/earnings, such as performance,

health difference, regional pattern, race, family income, and personality, etc. The importance

of family background in connecting birth season and education outcomes was revisited by

Buckles and Hungerman in 2013. Employing family survey data, they document seasonality

of maternal characteristics for births. Since winter births are disproportionally realized by

teenagers and unmarried women, half of the seasonal relation between birth and later

outcomes can be attributed to family background.

Since Angrist and Krueger’s pioneer work, there is a growing body of research focusing

on the influence of school entry age in other policy settings and on extensive outcome

variables. Most but not conclusive recent empirical evidence comes from Northern European

countries. Similar with the law in China, policy in these countries constitutes of two important

parts: nine-year compulsory schooling and attendance law based on cutoff date. These two

features can further validate birth month as IV and protect the results from contamination of

dropout. With rare exception that finds insignificant effect in Germany (Fertig and Jochen,

2005), almost all the evidence points to one direction that later enrollment benefits various

outcomes, no matter test scores, accomplished schooling or adult income (Bedard and Dhuey,

2006, OECD; Puhani and Weber, 2006, Germany; Fredriksson and Öckert, 2006, Sweden;

Plug, 2001, Netherlands; Black, Devereux and Salvanes, 2011, Norway; Solli, 2011, Norway;

McEwan and Joseph, 2008, Chile). Even though the US and England are in different settings

allowing for dropout, similar conclusion are drawn using test scores in kindergarten and

primary school (Crawford, Dearden and Greaves, 2011, England; Datar, 2004, US; Elder and

Lubotsky, 2009 US).

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 A similar debate is under discussion since 1980s in China. Wang and Kan (1987) studied

ten primary schools in Shanghai. Correlation analysis shows that early enrolled students are

lagged behind both in academic records and interpersonal skills. Lei, et al. (2004) collected

information of 369 primary school students in Shandong and used ANOVA to analyze school

age effect on academic records. Early enrolled students exhibit higher achievement than their

counterparts. However, neither of them are presentative in sampling or successful in

addressing endogeneity problem.

2.2 Mechanisms behind the causal relation

Then a more interesting question arises that what’s the underlying mechanism relating

school entry age to various outcomes. Empirical evidence on mechanism is rare in quantity

and not that clear in quality. The first problem encountered is how to disentangle absolute age

effect and relative age effect. They both have theoretical root in psychology. Psychologists

suggest that there is sensitive period for cognitive development. If children receive proper

stimulus during sensitive period, they are likely to go ahead in cognitive skills (Aslin, 1981).

The sensitive period theory stresses on the absolute age of school entry and predict the

relationship to be nonlinear. On the other hand, relative age effect puts emphasis on maturity

and readiness of school children. Recently there are vast research and social programs

proposing a long-lasting and accumulating effect engendered by small difference in childhood

(Bedard and Dhuey, 2006; Currie, 2001; Heckman, 2006). Transferring relative age into age

rank, Fredriksson and Öckert (2006) document a more salient absolute age effect than relative

age effect. A derived problem for studying school test scores is how to separate relative age

effect and age-at-test effect. But if we use the accomplished education as dependent variable,
7
this problem is less severe. Both absolute age effect and relative age effect function through

initial skill accumulation which may last into adulthood. On the other side of the coin, school

starting age affects graduation age if all the people are required to accomplish the same

amount of schooling. Combining life cycle theory and opportunity cost theory, the

opportunity cost for later-entrants is higher. Elder and Lubotsky (2009) find that the age-

related differences in early school performance are mainly due to knowledge accumulation

before school and tend to fade out as students move on. In a paper studying the relationship

between graduation age and fertility decision, Skirrekk et al (2004) imply that the age of

finishing one stage has impact on the timing of next stage.

3. Identification strategy

For the empirical analysis, I use CFPS (Chinese Family Panel Study) Adult Survey

conducted in 2010. Adult Survey of CFPS covers a national representative sample aged 16

years old or above, and collects detailed demographical information, especially on education

history. To avoid extreme values generated by factors other than policy and to efficiently find

out the affected samples, I only keep children whose enrollment decisions are made during

age 4.75 to age 8.75 (exactly cover four school entry years for the same cohort. Please find

details in Appendix 1). In total, I obtain more than 5,000 observations from 25 provinces.

Mean and standard deviation for some key variables are summarized in Table 1.

The Compulsory Education Law was firstly introduced in April 1986 and put into

practice in July of the same year on the national scale. The implementation date for each

province varied from 1985 to 1994 (see Appendix 2). Generally, the 1986 Compulsory

Education Law was related to our topic via the following ways:
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 a. The State shall adopt a system of nine year compulsory education;

b. All children who have reached the age of six shall enroll in school and receive

compulsory education for the prescribed number of years, regardless of sex,

nationality or race. In areas where that is not possible, the beginning of schooling

may be postponed to the age of seven. The cutoff date is August 31st.

The first article has greatly improved the overall education of Chinese people (Fang, et al,

2012). The second article creates exogenous variations in school entry age: children who are

born between January and August can start school in the year when they reach the age of six,

while their counterparts born between September and December have to wait until the next

year. As a result, August-borns and September-borns are only one month apart in biological

age but the difference in their school starting age can be as large as 11 months. Combining

these two articles, I develop the idea of my IV. Children who are already 7 years old but

under 15 years old when the Law took place are only subject to the first effect but not the

second, so they serve as control group in my analysis1. While children who are younger than 6

years old in the implementation year are influenced by compulsory school duration and

attendance law simultaneously, serve as treatment group. As is illustrated in Table 2, the later-

born children (September to December) consequently are held back to later enrollment and

the hold back effect only exists for the treatment group.

However, three threats may invalidate my DID design. Firstly, what if ante-law children

also enroll according to the cutoff policy? As is shown in Figure 1b, in the scenario that both

groups comply to the cutoff pattern, school entry age for control-and-treatment groups are two

1
For the purpose of simplicity, I treat age of six as the legal school age because it’s implausible to find out which areas
adopted seven as school entry age.
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parallel curves that subtracting one from another only produces a constant line across birth

month. An alternative attendance pattern for ante-law group is the same cohort also enroll in

the same year regardless of birth month. That will produce a downward sloping line across

January to December, and the school entry age gap remains stable before August but suddenly

jumps to a higher level since September (see Figure 1a).

Unfortunately, it’s hard to document the attendance pattern before 1986, because there

was no unified attendance age at that time and most provinces defined proper school age

(shilingertong) to a broad range (7 to 11 years old). What we can do is to resort to the CFPS

data and to summarize the pattern from observations. Figure 2 plots average school entry age

for control and treatment groups. Even though not 100 percent coincide with the pattern

described in Figure 1a, there is an apparent pattern change for treatment group. The narrowing

gap since September lends preliminary support to our DID design.

The second question arises that how did parents respond to the attendance policy? Is

there a possibility that parents plan the timing of pregnancy according to the cutoff date? But

this concern proves to be a less severe problem in my analysis. Plotting the percentage of

birth month before and after the law came into effect in Figure 3, I obtain two similar

distribution patterns. Although babies born before the cutoff date have risen from 60% to 62%,

the gap is not significant at 5% level (the p-value is 0.54). If we pay special attention to the

September-born babies, there is no violent change either relative to the August. Considering

that Chinese people have a tradition to choose Chinese Zodiac (it’s determined by birth year),

parents are more likely to plan birth around the beginning or end of one year, rather than the

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cutoff date in August. To further eliminate the impact of family, I will control for parents’

education and run household fixed effect model to get over unobservable family factors.

The third question arises that how is the attendance policy enforced since 1986? What if

parents violate the attendance law? To have a better view, I firstly regress school entry age on

the interaction term between birth month and treatment, then plot the coefficient in Figure 4.

Not surprisingly, the gap doesn’t jump suddenly in September, but rather increase gradually.

The observed pattern is reasonable. Suppose there is a pool of children that intend to enter

school earlier than the policy. Since school quota is limited, the principal will firstly consider

September-born children and pass the quota to the next month given other conditions being

equal. As a result, the proportion of manipulation should be the largest for September,

followed by October, November and December. That explains why the school entry age

increases at incremental pace from September to December.

Until now, the interaction term between After8 (born after August) and Treatment

(influenced by the Law) as IV obtains preliminary support from the data. But we should

always keep in mind that reality may deviate from theory. Especially it’s in China, where

implementation can vary substantially across provinces and violations may be unevenly exist.

In the next section, I will try to find the strict compliers of the Law.

My analysis will proceed as follows. Two sets of dependent variables are employed to

measure educational attainment: continuous year of schooling and a dummy variable

indicating whether the respondent has ever attended high school. Since primary school and

middle school are already mandated, high school attendance is the first self-made decision

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and of special interest to my study. The baseline model will regress the dependent variable on

school entry age with a couple of variables being controlled. To overcome endogeneity

problem of age at school enrollment, I will use After8*Treatment to instrument school entry

age. But using a simple IV is far from satisfactory from eliminating violation concern. To

further narrow down the sample and find the strict compliers, I plan to do the same analysis

for urban/rural, male/female, high SES/low SES subsamples.

4. Estimation results

To begin with, I investigate the basic correlation between school entry age and years of

schooling. Column 1 of Table 3 summarizes the baseline estimation for the whole sample.

Consistent with our hypothesis, school entry age is significantly negatively correlated with

eventual educational attainment. Other variable being constant, entering school one year

earlier can increase schooling by around 0.35 years. Since family background may play a

determinant role in children’s attainment (Bound and Jaeger, 2000; Buckles and Hungerman,

2013), I control for parents’ education level in Column 2. Even though incorporation of

more variables leads to a smaller sample size, the impact of school entry age is still significant

and hovers around 0.3 years. In the next two columns, I employ province fixed-effect model

and household fixed-effect model respectively. The magnitude of school entry age effect

doesn’t change much after removing inter-provincial differences, but it shrinks less than one

half once unobservable family factors are controlled. Yet one year earlier enrollment can still

transfer into 0.18 years of schooling bonus. Big impact of household fixed effect implies that

there may be other unobservable household characteristics affecting school entry age and

years of schooling simultaneously. The last column examines how school entry age influences
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the decision to go to high school. Consistent with above findings, early enrollment by one

year can add 3.3% likelihood to attend high school.

However school entry age may be endogenous for the reasons we have discussed. If it’s

the case, my baseline regression is very likely to overestimate the benefit of early enrollment

or even distort the direction of school entry age. So in the following analysis, I will replace

the age at school entry with an interaction term between birth month and birth year, which

should be exogenously determined by the Attendance Policy only.

IV estimation results are reported in Table 4. Central to the analysis in this paper is how

the school enrollment pattern is shaped by the Attendance Law, in other words, the first stage.

Consistent with the policy prediction, the Attendance Law increases the school entry age of

after-August-borns by 0.143 years (see Column 1). But F test of excluded instruments is only

7.15, alarming that my IV may be weak and bias the second stage to the same direction as

OLS. To better find out the strict compliers of the Attendance Law and to gain credibility of

IV, I run the same regression for different subgroups from Column 2 to Column 10 and come

up with several interesting conclusions. First of all, the Attendance effect only exists for

males but not for females. Secondly, the Attendance effect only exists among rural and low

SES samples. Different explanations contribute to the above results. Suppose parents violate

the Attendance Law based on either of these two conditions: children’s developmental

advantage or parents’ ambition. If the kid stands out even from childhood, his parents are

more likely to ignore the Attendance Law and send him to school earlier. If their parents are

more ambitious and realize the importance of education, they also have a higher probability to

send children to school earlier. Not surprisingly, rural families and low SES families
13
(measured by fathers’ education level) are more obedient to the Law. Because they are less

conscientious of the importance of education and lack effective network in the meantime.

In the contrary, the gender differences are, at least partly, generated by developmental

disparities. Brain development in girls occurs much earlier than in boys, which partially

explains why their school entry pattern is less clear. Figure 5 and Figure 6 exhibit the average

school entry age across birth month for males and females (just as Figure 2 does). Agreeing

with the regression results, boys are strict compliers of the Law: after-August-borns are 0.217

years older at school entry after the Law and the gap occurs at a jump since September. In the

contrary, pattern for girls are less clear and far from policy prediction. The difference

generated by After8*Treatment is either minimal in magnitude (0.065) or insignificant in

statistics. The most reliable explanation could be girls’ parents violate the law more

frequently. A minor support comes from the fact that in the presence of strong son preference

in China, the average school entry age of girls is always close to boys, indicating that at least

girls catch up in some ways. Yet the developmental difference alone is far from convincing to

explain the gender disparities. Since our IV is not applicable to females, the following

analysis focus on males only.

Considering that China is vast in territory and the administrative authority of education is

decentralized to the provincial level, the Attendance Law may be implemented to different

degree across provinces. In the last two Columns of Table 4, I use a rough criterion to

distinguish between complier provinces and non-complier provinces, that whether the

direction of first stage is positive. By this criterion, 16 of the 25 sampled provinces and 63%

of my samples are compliers of the Attendance Law. But we should note that “non-compliers”
14
are not equivalent to violators. Attendance pattern in some provinces isn’t consistent with the

policy prediction maybe not because they don’t follow the Law but due to that they have

already formed the same pattern before the Law.

Then we come to the second question that how did the exogenous variations in school

entry age bring effect to the final education. In Table 5, I only focus on males and the

intersection samples. For males, the Attendance Law increases the school entry age of after-

August-borns by 0.217 years, and one year delay at school entry can transfer into nearly two

years disadvantage in attained education and 34% decrease in the probability of going to high

school. If we look at the overlapped samples for Column 3 to Column 5, the results are quite

stable.

As follow-up steps, I further explore when does the age at school enrollment exert

impact on schooling and whether it’s invariable across different stages. Table 6 repeats the IV

estimation using three dummy variables to denote enrollment of middle school, high school

and college respectively. After controlling endogenous variations, school entry age is

negatively correlated with attendance of each schooling stage. Yet the correlation is only

statistically significant for attendance of high school. It’s estimated that entering primary

school one year later will decrease the chance of enrolling in high school by 30 percent point

conditional on completion of middle school. The effect of school entry age on middle school

is minimal and insignificant. The effect on college is not significant conditional on

completion of high school. The stage regression results are reasonable. Since middle school is

mandated by the Law, the school entry age has little impact on middle school attendance.

College entrance in China is merit-based, so the insignificant effect in the last column implies
15
that school entry age makes little difference to academic performance, lending preliminary

support to the opportunity cost story. I will illustrate more in the mechanism discussion part.

Although both questions are well answered towards the direction predicted by our

theories, the magnitude from 2SLS is extraordinarily large compared to OLS. For example,

deferring school by one year only declines the final education by 0.34 years in OLS but

around 2 years in 2SLS (if we focuses on males only). Does school entry age really play such

a strong role in determining education or something else bothers my identification? After all,

nearly 40% samples are cleared out before regression due to misreporting or incompleteness

of school entry age, which may distort the impact of school entry age. Therefore, I resort to

the 2005 Mini Census Data as robustness check in Table 7. Column 1 represents the most

restricted sample with complete and reasonable information from CFPS, while Column 2 also

includes those who previously fell within either treatment or control group but were deleted

due to school entry age missing. Column 3 is derived from 2005 Mini Census Data and

consists of comparable samples of exactly the same cohorts from the same prefectures to

Column 2. Although CFPS is a national representative data, there are still a few provinces

uncovered. So in the last column, I extend the sample to all the provinces and prefectures in

order to draw a more general picture from national scale. But regression in Table 7 is still

slightly different from Table 4 in the following points: (1) The dependent variable is a dummy

variable indicating whether attended high school or not. Because there are a large number of

treated samples hadn’t accomplished college by 2005; (2) Since the census data doesn’t

contain information about school entry age, I regress high school enrollment on the DID term

(After8*Treatment) directly; (3) Parents’ education level are no longer controlled and hukou is
16
defined based on status at survey point because of the limitation of data availability in the

Census. Results from the most restricted sample, consistent with the previous estimation, are

nearly four times larger than comparable sample. Yet Column 2 and Column 3, which are

comparable in sample composition, are also alike regarding the magnitude of Attendance

effect. Being a child born after August and influenced by the Attendance Law will decrease

probability of going to high school by 1.1% to 1.5%. This conclusion is applicable on the

national scale. Robustness check using the 2005 Mini Census Data further confirms our

conjecture that school entry age is negatively related to education. What’s more, the Census

Data corrects the magnitude we obtained from CFPS. Results in Table 6 define the upper

bound for school entry age among certain group of people.

Results above are amazing for the direction of effect. Without exception, experiences

from western countries suggest that later enrollment is beneficial for a series of later outcomes,

such as cognitive development, academic records, education attainment and even earnings in

labor market. As far as I know, China is the only case early enrollment can lead to future

benefits. Then, a more interesting question arises that through what mechanism does school

entry age influence educational attainment, because early birds do better in academic

performance, or because they have smaller opportunity cost, or mixed? In the next section, I

will discuss possible mechanism of school entry age.

5. Mechanism discussion

As I concluded in the past, school entry age is connected with education attainment via

two ways. The competency story describes one scenario that going for more education is a

decision made on competence. Variation in school entry age induces differential cognitive
17
development, and more competitive students have higher chance for further study. In the

contrary, the opportunity cost story treats further education as an alternative choice for

entering labor market in the long sequence of life. Accomplishing same level of education,

individuals who begin later are very likely to graduate later and the opportunity cost for

further study is higher. Both stories hold in China. China provides nine years of compulsory

and free education. Completion of primary school and middle school mostly depends on

willingness rather than competence. Even though well-known high schools and leading

universities accept students on the basis of academic performance, there are still enough

regular high schools and technical colleges open to the remained. Competence story and

incentive story may interact to shape the observed correlation.

(1) Testing Competence Story

My strategy to test competence story is to examine the exogenous effect of school entry

age on cognitive skills. CFPS contains math test and word test, which are scored from 0 to 34.

Since they are taken at the same time point, we are unable to trace strength of school entry age

effect in different periods. We assume that cognitive skill is a function of school entry age,

confounding variables that both relate to school entry age and cognitive skills, and other

demographical controls. IV can help me to get rid of confounding variables. Then I can

isolate the pure effect of school entry age on cognitive skills independent on education,

natural endowment and family characteristics. If school entry age is proved to have positive

effect as predicted by previous literatures, or no effect on cognitive skills, that means the final

negative impact on education is driven by incentive story.

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 Table 8 concludes OLS and IV estimates of school entry age on word test and math test.

I still use the interaction term (After8*Treatment) to instrument school entry age. School entry

age demonstrates negative impact on word test scores and math test scores using OLS

estimation. As is shown in Column 2 and Column 4, deferring school enrollment by one year

reduces word test score by 0.327 point and 0.311 point for math test score. But if we control

for the confounding variables using IV, school entry age doesn’t have impact on cognitive

skills any longer. The implication is that early birds and late birds are comparable in

cognitive development if anything else remains constant. But what I obtain is only a result,

it’s not likely to further explore how does the competence advantage vanishes. Does it

diminish as age grows older or the disadvantage is compensated by parents? To answer these

questions, longitudinal data is needed.

(2) Testing Opportunity Cost

In a working paper by Brauw and Giles (2008), they documented the negative

relationship between migration opportunity and high school enrollment. The suggested

mechanism is the enlarged migrant network will reduce migration cost, thereby inducing

young adults of high school age to work rather than to study. Their work inspires mine in two

ways: (1) the size of migrants from origin is positively related to the opportunity cost of high

school study; (2) the relationship between school entry age and education may vary across

areas with different out-migration rate. Therefore, if I aims to verify early birds fly high

because they face lower opportunity cost for study, I can control for out-migration rate and

see in various labor-export areas how sensitive is the educational attainment to school entry

age. My hypothesis is that school entry age has larger effect on educational attainment where
19
the opportunity cost is higher. If migration opportunity is rare and further study makes little

difference for future income, when the respondent enter school and when he graduates thus

have smaller impact on education decision.

Using 2005 Mini Census data, I compile the out-migration rate2 at prefecture level.

Ideally I should match each cohort to the year when they face the further study decision. But

migration is hard to be measured yearly at prefecture level, and it’s merely recorded in 1980s.

So I simply employ the 2005 migration data to control for local opportunity cost over the two-

decade period, given that migration heavily relies on former accumulation and is quite

consistent over time. I also divide the prefecture observations into high out-migration areas

and low out-migration areas according to the median. Table 9 reports the regression results of

high school attendance on After8*Treatment for separate samples. Consistently, the reduced

form of school entry age has a more negative impact on education in high out-migration areas,

indicating that opportunity cost makes school entry age more sensitive. Although the results

for rural samples are not significant, it may be attribute to the long span in time of our

observations. Large proportion of current urban residents are originated from rural areas, they

should be counted as a whole.

Therefore, we can come to a cautious conclusion that opportunity cost story outweighs

competence story for China’s situation. The significant and negative relationship between

school entry age and years of schooling is mainly derived from the variation of opportunity

2
Migration is defined as labor force population (15-64 years old) working outside household registration prefecture for more
than six months.
20
cost. Younger graduates are more willingly to continue education, whereas it’s more costly

for older graduates to do so.

6. Conclusion

The 1986 Compulsory Education Law is a great event in contemporary China.

Accompanying with the pace of reform and open-up, elementary education was firstly

expanded to the counties, to the remote, and to the poor. Policy communities used to owe the

great enhancement in education to the “nine-year education” per se, yet the significance of its

impact in reducing school entry age is under-evaluated. My paper uncovers school entry age

as a second way to improve education level and come up with the following findings;

Firstly, early school enrollment is beneficial for educational attainment. Making use of

exogenous variation in school entry age created by birth month together with the 1986

Education Law, years of schooling will decrease by 2 years as enrollment is deferred by one

year.

Secondly, the negative relationship between school entry age and education is mainly

driven by opportunity cost story. There is no evidence showing that early enrollment can

bring advantage in cognitive development, if we instrument school entry age with IV. A more

convincing explanation is that early birds graduate at younger age with the same amount of

human capital, and they are more willing to continue education because it’s less costly.

Yet there are still some unsolved challenges. Firstly, even though I can resort to some

statistical instruments to handle endogeneity and violation, we can’t measure how family

21
compensates for the disadvantage encountered in school (Crawford, Dearden and Greaves,

2011; Black, Devereux and Salvanes, 2008).

Secondly, selectivity of which kids start school earlier may be different before and after

reform. For example, if rule says those born after August should wait a year, then those that

don’t wait and still manage to enroll are more strongly selected on parental ambition for kids,

than prior to reform when all parents could do what they want.

22
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25
 Table 1: Summary Statistics of Key Variables
Whole Control Treatment
Mean/Percent N Mean/Percent N Mean/Percent N
Years of schooling 10.64 5,149 10.17 2,273 11.00 2,876
(3.31) (3.26) (3.30)
High school 0.46 5,149 0.40 2,273 0.50 2,876
School entry age 7.12 5,149 7.26 2,273 7.02 2,876
(0.89) (0.88) (0.87)
Male 0.49 5,149 0.51 2,273 0.48 2,876
Rural hukoua 0.77 5,106 0.77 2,255 0.77 2,851
Father accomplish 0.21 4,863 0.16 2,106 0.24 2,757
high school
Mother accomplish 0.12 4,910 0.07 2,149 0.15 2,761
high school
Note: a. Hukou in this paper refers to the status at age three. Because it’s more close to school enrollment.

Table 2: Two Effects of the Compulsory Education Law

School-duration effect Attendance law effect
Control group
(7-15 years old when the Y N
law came into effect)
Treatment group
(6 years old or younger
Y Y
when the law came into
effect)

26
Table 3: Estimation Results of Attained Education on School Entry Age
(1) (2) (3) (4) (5)
Whole Parents’ Province Household High
sample education FE FEa school
controlled
OLS OLS OLS OLS OLS
School entry -0.356*** -0.300*** -0.300*** -0.186** -0.033***
age (0.050) (0.050) (0.048) (0.083) (0.008)

Male Y Y Y Y Y
Rural hukou Y Y Y Y Y
Father's N Y Y Y Y
education
Mother's N Y Y Y Y
education
Birth year Y Y Y Y Y
Province Y Y -- Y Y

Observations 5,106 4,722 4,722 4,722 4,722

Note: Standard errors in parentheses are clustered at community level.
*** p<0.01, ** p<0.05, * p<0.1
a. In the household fixed effect model, parents’ education levels are still controlled.

27
Table 4: IV Estimation Results for Subgroups
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Whole Male Female Rural Urban Father Father not Complier Non-
high high provinces complier
school school provinces
First stage: DV= School entry age

After8*Treatment 0.143*** 0.217*** 0.065 0.158*** 0.106 0.091 0.148*** 0.257*** -0.084
(0.053) (0.071) (0.079) (0.060) (0.103) (0.115) (0.056) (0.065) (0.092)

Second stage: DV= Years of schooling

School entry age -1.027 -2.043* 2.519 -0.518 -4.424 -7.173 -0.613 -1.095 -0.533
(1.184) (1.173) (4.742) (1.285) (4.793) (9.106) (1.235) (0.808) (3.416)

N 4,722 2,340 2,382 3,622 1,100 1,146 3,725 2,977 1,745

F test of excluded 7.15 9.36 0.67 6.86 1.07 0.63 7.02 15.83 0.84
instruments
Note: Standard errors in parentheses are clustered at community level.
Variables including gender, hukou, parents’ education, birth year dummies, birth month dummies and province dummies are controlled.
*** p<0.01, ** p<0.05, * p<0.1

28
Table 5: IV Estimation Results for Potential Compliers
(1) (2) (3) (4) (5)
Male Male Male&rural Male&low SES Male&complier
First stage: DV= School entry age/ High school

After8*Treatment 0.217*** 0.217*** 0.212*** 0.194** 0.310***

(0.071) (0.071) (0.080) (0.075) (0.087)

Second stage: DV= Years of schooling

School entry age -2.043* -0.341* -2.311* -2.262 -2.209**

(1.173) (0.195) (1.402) (1.522) (1.056)

N 2,340 2,340 1,792 1,845 1,478

F test of excluded 9.36 9.36 7.03 6.60 12.75
instruments
Note: Standard errors in parentheses are clustered at community level.
Variables including gender, hukou, parents’ education, birth year dummies, birth month dummies and province dummies are controlled.
*** p<0.01, ** p<0.05, * p<0.1

29
Table 6: IV Estimation Results of Different Stages for Males
(1) (2) (3)
Attended middle school Attended high school Attended college
School entry age -0.018 -0.403* -0.244
(0.130) (0.244) (0.213)

N 2,340 2,042 1,100

Note: Standard errors in parentheses are clustered at community level.
Variables including gender, hukou, parents’ education, birth year dummies, birth month dummies and province dummies are controlled.
*** p<0.01, ** p<0.05, * p<0.1

Table 7: Robustness Check Using 2005 Mini Census Data (regressing high school attendance on After8*Treatment)
2010 CFPS 2005 Mini Census
Restricted Comparable Comparable Whole
After8*Treatment -0.068** -0.015 -0.011*** -0.011***
(0.032) (0.029) (0.004) (0.003)

Birth month Y Y Y Y
Birth year Y Y Y Y
Province Y Y Y Y
Hukou Y Y Y Y

N 2,527 3,657 160,986 313,575

Note: Standard errors in parentheses are clustered at prefecture level.
Variables including gender, hukou, birth year dummies, birth month dummies and province dummies are controlled.
*** p<0.01, ** p<0.05, * p<0.1

30
Table 8: IV and OLS Estimation Results of Cognitive Skills on School Entry Age
Word test Word test Math test Math test
OLS IV OLS IV
School entry age -0.327*** 0.198 -0.311*** -1.013
(0.137) (2.180) (0.098) (1.013)

Birth cohort Y Y Y Y
Birth month Y Y Y Y
Other controls Y Y Y Y
Note: Standard errors in parentheses are clustered at prefecture level.
*** p<0.01, ** p<0.05, * p<0.1

Table 9: Regression Results of Years of Schooling on School Entry Age (out-migration rate controlled)
Whole Rural Urban
High out- Low out- High out- Low out- High out- Low out-
migration migration migration migration migration migration
After8*Treatment -0.014*** -0.0128** -0.009 -0.007 -0.031*** -0.021***
(0.005) (0.004) (0.006) (0.005) (0.010) (0.008)

Birth month Y Y Y Y Y Y
Birth year Y Y Y Y Y Y
Province Y Y Y Y Y Y
Hukou Y Y -- -- -- --

N 129,720 183,855 99,162 126,493 30,558 57,362

Note: Standard errors in parentheses are clustered at prefecture level.
*** p<0.01, ** p<0.05, * p<0.1

31
Figure 1a: Attendance Pattern for Control Group and Treatment Figure 1b: Attendance Pattern for Control Group and Treatment
Group (assuming control group complies with pattern 2) Group (assuming control group complies with pattern 1)

32
Figure 2: Average School Entry Age for Control and Treatment Groups
Data source: CFPS 2010

33
 12

10

0
1 2 3 4 5 6 7 8 9 10 11 12

Control Treatment

Figure 3: Distribution of Birth Month before and after the Compulsory Education Law
Data source: CFPS 2010

34
 0.6

0.5

0.4

0.3

0.2

0.1

0
1 2 3 4 5 6 7 8 9 10 11 12
-0.1

-0.2

-0.3

coefficient lower5% upper5%

Figure 4: Coefficient of Interaction Term between Birth Month and Treatment

Data source: CFPS 2010

35
Figure 5: Distribution of Birth Month before and after the Figure 6: Distribution of Birth Month before and after the Compulsory
Compulsory Education Law (males) Education Law (females)
Data source: CFPS 2010 Data source: CFPS 2010

36
Appendix 1: Illustration of Selection of School Entry Age
1985 1986 1987 1988
Jan 5.67 6.67 7.67 8.67
Feb 5.58 6.58 7.58 8.58
Mar 5.50 6.50 7.50 8.50
Apr 5.42 6.42 7.42 8.42
May 5.33 6.33 7.33 8.33
Jun 5.25 6.25 7.25 8.25
Jul 5.17 6.17 7.17 8.17
Aug 5.08 6.08 7.08 8.08
Sep 5.00 6.00 7.00 8.00
Oct 4.92 5.92 6.92 7.92
Nov 4.83 5.83 6.83 7.83
Dec 4.75 5.75 6.75 7.75
Note: For children who are born in 1980, their possible school entry age are listed above. Those
who attend primary school in 1986 and 1987 with mark are strict compliers of the attendance law.

37
Appendix 2: Implementation Date of Compulsory Education Law for Different Provinces
Province Implementation date Validation year
Zhejiang 1985/9/1 1985
Jiangxi 1986/2/1 1986
Heilongjiang 1986/7/1 1986
Liaoning 1986/7/1 1986
Hebei 1986/7/1 1986
Shanxi 1986/7/1 1986
Ningxia 1986/7/1 1986
Sichuan 1986/7/1 1986
Chongqing 1986/7/1 1986
Beijing 1986/7/8 1986
Jiangsu 1986/9/9 1987
Shanghai 1986/9/10 1987
Shandong 1986/9/12 1987
Henan 1986/10/1 1987
Guangdong 1986/10/7 1987
Yunnan 1986/10/29 1987
Tianjin 1986/11/6 1987

38
Jilin 1987/2/9 1987
Hubei 1987/3/1 1987
Shaanxi 1987/9/1 1987
Anhui 1987/9/1 1987
Guizhou 1988/1/1 1988
Xinjiang 1988/5/28 1988
Fujian 1988/8/1 1988
Inner Mongolia 1988/9/15 1989
Qinghai 1988/10/1 1989
Gansu 1990/9/3 1990
Hunan 1991/9/1 1991
Guangxi 1991/9/1 1991
Hainan 1991/12/16 1992
Tibet 1994/7/1 1994

39