Friends from Afar: The Taiping Rebellion, Cultural Proximity and Primary Schooling in the Lower Yangzi,

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1 Friends from Afar: The Taiping Rebellion, Cultural Proximity and Primary Schooling in the Lower Yangzi, Yu Hao Peking University, School of Economics Melanie Meng Xue UCLA Anderson School of Management This Version: June 2016 Abstract This paper tests the hypothesis that the cultural distance between migrants and natives impedes public goods provision. The Taiping Rebellion was a shock that caused groups without a history of shared governance to be relocated into the same region. We use a unique historical dataset of surnames in the Lower Yangzi of China to construct a measure of the cultural distance between migrants and natives (MNCD). We find an one-standard-deviation increase in MNCD is associated with a decrease of over 0.19 public primary schools per 10,000 persons in the early 20th century. Results survive various robustness checks and an instrumental analysis exploiting pre-existing cultural distances between native and the nearby population. Evidence from the timing of MNCD taking effect, suggests that the primary mechanism runs from migrant-native cultural distance through quality of collective decision-making to modern primary education. Keywords: Cultural Distance; Primary Education; Local Public Goods; Quasi-Exogenous Migration JEL Codes: D72, J15, N45, N95, O15, Z1 We thank the editor Debin Ma, two anonymous referees, as well as Ying Bai, Zhiwu Chen, Qiang Chen, Gregory Clark, Christian Dippel, Mark Koyama, James Kung, Nan Li, Kris Mitchener, Jean-Laurent Rosenthal, Tuan Hwee Sng, Romain Wacziarg, Noam Yuchtman and conference participants at the All-UC Conference on Frontiers in Chinese Economic History, Chinese University of Hong Kong, Shandong University, Xiamen University and Peking University for helpful comments and suggestions. All remaining errors are the responsibility of the authors. maxhao1003@pku.edu.cn melanie.xue@anderson.ucla.edu

2 I. INTRODUCTION An extensive literature documents the negative impact of population heterogeneity on public goods provision (Easterly and Levine, 1997; Alesina, Baqir, and Easterly, 1999; Alesina and Ferrara, 2005). However, recent research suggests the lack of history of shared and centralized governance between groups is just as likely to be responsible for the adverse outcomes associated with the coexistence of different ethnic groups(gennaioli and Rainer, 2007; Michalopoulos and Papaioannou, 2013). This raises the question whether ethnic cleavages or artificial jurisdictions has caused poor economic performance. Dippel (2014) contributes to the debate by showing that a lack of a history of shared governance can negatively affect even ethnically and linguistically homogeneous populations. We instead show that even for previously detached groups, cultural distance can matter for the coexistence of different ethnic groups. We exploit variation in cultural distance between previously detached groups following an external shock: the Taiping Rebellion. We use a unique dataset of Chinese surnames of approximately 100,000 individuals over the course of 150 years. The same dataset also allows us to build common measures of population heterogeneity such as fractionalization and polarization. The Taiping Rebellion ( ) was a massive civil war in South China that constituted a one-time shock to the population makeup. The rebellion led to the loss of 17 million lives in the Lower Yangzi, or half of the native population (Cao, 1998). After the war, migrants flocked into the region and began to coexist with natives. This shock created two groups without a history of shared governance or prior interaction in a region. Cultural proximity between migrants and natives varied. We hypothesize that cultural distance between migrants and natives ( MNCD ), who lived in the same community after the rebellion, had a negative impact on public goods provision. We provide the historical context to show that migration was plausibly exogenous to the cultural distance between migrants and natives. First, migrants moved into the area with little prior contact with natives. Migrants were not selected based on their cultural proximity with the natives (as is the case with chain migration). Ex-ante sorting was minimum. Second, in traditional China where ancestral land was of cultural prominence, natives were not able to move out as freely in response to the arrival of migrants whose preferences differed. Hence ex-post selfsorting was not a concern, either. 1 To further establish causality, we introduce an instrumental variable approach exploiting variation in pre-existing native-nearby cultural distance. We go on to test our hypothesis that a greater migrant-native cultural distance lowers public goods provision. Our proxy for public goods provision is the number of public primary schools at county level. In the baseline model, we find that a one-standard-deviation increase in MNCD is associated with a decrease of 0.19 public primary schools per 10,000 persons between Compared to Ager and Brückner (2013), we use arguably more exogenous migration as a treatment, as natives and migrants had few opportunities to engage in ex ante screening, or ex-post self-sorting. 1

3 and That is a fifth of the mean of the number of public primary schools by population, or 40% of the standard devision. We then include in the controls share of arable land, distance to the Grand Canal, distance to the Yangtze River, distance to the provincial capital, and distance to Shanghai. We show that MNCD wins horse races against alternative explanatory variables including the traditional fractionalization index and the polarization index. For robustness, we control for initial conditions, interventions in education (missionary activities and temple conversion), and confront possible effects of war (battle exposure, demographic shock and human capital shock) on schools. While our key finding is that cultural distance has an independent effect on public goods provision outcomes, we find evidence that the negative effects of the cultural distance between surname groups can be mitigated by the history of shared governance. Our finding is mainly built off the horse race results of MNCD against other measures of population heterogeneity that ignore the history of shared governance within native surname groups. We provide suggestive evidence on the mechanisms through which MNCD prevented the establishment of public primary schools. First, we exploit institutional features of early 20th century China to form a testable hypothesis : MNCD should have the strongest effect on lower-primary and dual-primary schools, since (a.) MNCD should matter the most in an environment of selfgovernance, (b.) villages were traditionally self-governed, and (c.) villages (and townships) were responsible for the building of lower-primary schools, and sometimes, dual-primary schools. 2 Consistent with our prediction, we find that MNCD only affects schools at lower-primary and dual-primary schools, not at upper-primary and secondary schools. Second, we exploit time variation in institutions through the first half of the 20th century. Massive institutional changes in 20th century China provides an excellent laboratory to observe the impact of MNCD. In our sample, we have periods of decentralization and centralization of the education system, when decisions to education children were made locally and when those decisions were made by the national or provincial government, respectively. This allows us to use evidence from timing to interpret our finding. We expect to see a larger effect of MNCD during the period featuring more self-governance and more decentralization of fiscal authority. And consistent with this prediction, we find the effect of MNCD on modern education is pronounced in the early 20th century but is muted in China for much of the 20th century under autocratic rule and fiscal centralization. Soon after the centralization of the educational system in 1927, MNCD no longer had a significant effect on schools. We conclude that MNCD resulted in fewer primary schools being build due to lower quality of collective decision-making in local communities. Our study builds on the literature on the relationship between diversity of individual preferences and public goods provision. Alesina, Baqir, and Easterly (1999) show theoretically that the 2 At the time, the entire phase of primary education was divided into two: upper- and lower-primary education. Upper primary education refers to the more advanced stage of primary education. Most schools specialized in either upper- or lower-primary education. Those providing both upper and lower primary education were called dual-primary schools. 2

4 median distance from the preference of the median voter can be considered as an indication of how polarized preferences are. The model predicts that public goods provision will be adversely affected in a polarized society characterized by two separate groups with relatively homogeneous preferences within the group, but very distinct preferences across groups. More recent work shows that in the process of decentralization and redistricting, the benefits of reduced diversity can be undone if the newly governed population is highly polarized (Bazzi et al., 2015). In our paper, we use the cultural distance between migrants and natives as a proxy for the difference in preferences between these two groups. We find that cultural distances between groups indeed matter for public goods provision, whereas the traditional fragmentation measure that assigns the same distance to all groups does not produce the same effects. Our study also contributes to the literature of the effect of genetic dissimilarity on economic development. Ashraf and Galor (2013) find the beneficial and detrimental effects of diversity on productivity, and conclude that an immediate level of diversity is the most conducive for economic development. Desmet, Le Breton, Ortuño-Ortín, and Weber (2011) link genetic distance to the stability and breakup of nations, and provides empirical support for the use of genetic distance as a proxy of cultural heterogeneity. Spolaore and Wacziarg (2009) show genetic distance affects income differences across countries through a barrier effect to the diffusion of development from the world technological frontier. Our paper similarly uses genetic distance as a proxy for cultural distance, and focuses on the public goods provision consequences of greater genetic and cultural distances between groups. This paper is organized as follows. Section II explains the historical context. Section III discusses data sources and the basis for constructing our measure of migrant-native cultural distance. Section IV summarizes my baseline results and the comparison of migrant-native cultural distance to the fractionalization and polarization of the population. Section V introduces a number of robustness checks, accounting for initial conditions, interventions in education and war-related conditions. Section VI comprises an instrumental variable analysis. Section VII identifies the quality of collective decision-making as a possible channel for migrant-native cultural distance to influence the supply of modern primary education. Section VIII concludes the paper. II. HISTORICAL CONTEXT A The Taiping Rebellion The Taiping Rebellion was a massive civil war in South China which lasted from 1850 to At least 17 million people, or half of the populace, died in the lower Yangzi (Cao, 1998; Cao and Li, 2000). Battles broke out throughout the Lower Yangzi and all counties, with the exception of Shanghai, were occupied for at least 3 months. The area around Nanjing, the capital city of Taiping regime since 1853, had lingering conflicts for over ten years. The most prosperous and important cities in the Lower Yangzi, Hangzhou and Suzhou were occupied by the Taiping 3

5 army after Shanghai, protected by foreign powers, was the least affected, and it served as a shelter for over 200,000 refugees (Ge, 2002a, pp.62 63). Famine and plague followed the battles. So did mass migration. A.1 In-Flow Migration Migration occurred both during the Taiping Rebellion itself and in the aftermath of the rebellion. While migration internal to the Lower Yangzi was certainly common, post-taiping migration was best characterized by long-distance migration from North China and from the Middle Yangzi River. A crucial difference between pre- and post-taiping migration is that pre-taiping migration was largely driven by income differences, job opportunities, and based on ethnic bonds and geographic proximity (Li, 2011), whereas post-taping rebellion migration originated from a very wide range of geographic areas and featured diverse economic and cultural backgrounds. Another difference is the scale and pace of migration post-taiping migration was far more rapid and broader in scale. For this reason, in this paper we focus on post-taiping migration. 3 The mass migration led to conflicts between natives and migrants, and between different migrant groups. In villages and townships conflicts arose as a result of clashing preferences and interests, different dialects, skills and social customs. Conflicts, as documented in local gazetteers, took place over a wide range of issues such as usage of public water, property rights of ownerless land and eligibility for imperial exams (Ge, 2002a, pp ). A.2 The Economic and Political Consequences of the Taiping Rebellion The Taiping Rebellion constituted a multi-dimensional shock to the region. Most likely, it had more than one way to affect primary schools. Those effects could be at play on both the supply and demand side of education. In Section V.C, we provide a quantitative analysis of how various outcomes of the Taiping Rebellion might have affected the building of primary schools in the early 20th century. The rebellion damaged local infrastructure. In the Jiaxin prefecture of Zhejiang, 21% of Buddhist and Tao temples were destroyed by rebels affiliated with the God Worshiping Cult (Li, 2002). County public schools and private schools, where lower degree holders received further instruction to prepare for the higher level exams, were also destroyed or damaged in large numbers. The destruction of local infrastructure could have arguably undermined the resources useful to the launch of modern schools fifty years after the rebellion. That said, it is widely documented that most temples and schools were restored shortly and even more were built in the late 19th century. For example, Li (2002) found that 98 temples were destroyed by the rebels but 220 were built (or restored) within twenty years after the rebellion because living standards was 3 The provincial governments advertised all around China for migrants and depicted the Lower Yangzi as a kingdom of free land; and the land of opportunities. Farmers from Henan, Anhui, Hubei, Hunan, North Jiangsu, and South Zhejiang came for a better living (Ge, 2002a, pp ). After 1900, industrialization drew massive immigrants into the urban area of Shanghai (Junya and Wright, 2010). Its population increased by four-fold from 1907 to

6 even better than before the war and trade and commercial network was quickly restored. Kuhn (2002), to the contrary, interpreted this trend (along with the rise of local charity organization) as the rise of local gentry at provincial and county level overseeing local public affairs, which eventually led to the formalization of local self-governance in the early 20th century. The rebellion dismantled kinship networks. Clans used to provide financial aid for clan members to receive education. During the rebellion rich families migrated to the urban area with their less well-off relatives left behind in the countryside. Clans also lost land property to the war, the rent from which were assigned as public funds for supporting education (Li, 1981). As discussed by Xu and Yao (2015), kinship networks are an alternative to formal institutions in providing public goods by effectively overcoming free-riding problems. However, in the context of education reform in the 1900s, strong kinship networks can be a double-edged sword. Clans sometimes would prefer the option of funding informal and private tutoring exclusively enjoyed by clan members to establishing a school accessible by both clan and non-clan members. A weaker kinship network, in that case, may have reduced within-kinship public goods but enhanced cross-kinship public goods. The rebellion led to huge population losses, which induced higher land-labor ratios and higher wages (Cao and Chen, 2002). High wages forced war-stricken areas to abandon subsistence agriculture and switch to labor-saving technologies and industries. In Wujin and Wuxi, the silk industry superseded rice farming to be the largest employer in the rural area (Mickey and Shiroyama, 2009). Lin and Li (2014) show that areas with a larger impact of war saw more modern industrial enterprises in the late 19th century and had a higher level of urbanization in the 1930s. In addition, the rebellion inadvertently created political room for institutions in favor of modernization to set roots. Pro-reform officials were assigned to post-war provinces. They established formal institutions to promote industrialization. B Educational Reforms: From Traditional to Modern Education Fifty years after the Taiping Rebellion, Qing Government put forward an educational reform. The abolition of the imperial exam system went hand in hand with the attempt to establish a western-style, modern school system. Prior to 1905, education focused on Confucian classics and aimed at preparing students for the imperial examinations. The traditional educational system included two stages: mass primary education aimed for basic literacy and talent spotting, and more advanced education that drilled candidates selected from the first stage to pass the exams (Leung, 1994). In the late 19th century growing economic openness gave rise to higher demand for education in science, technology, and other non-exam skills (Yuchtman, 2015). Attempts by missionaries to build modern schools began in some coastal cities as early as the 1860s. But only until the abolishment of the exam system in 1905 did modern education begin to expand. The Ministry of Education was established, and Offices of Provincial Education was founded, along with county-level agencies known as Education Exhorting Offices (quan xue suo). 5

7 Educational reform was not a smooth process. Despite ambitious political and educational reforms, few things changed on the ground. For villages and townships, the process of building modern schools was slow and painful. County officials often found it difficult to raise county taxes, and make within-county transfers to ensure universal primary schools. Clans sometimes would prefer to provide direct financial aid to clan members for them to take cheaper informal and private tutorships, rather than establish a school open to both clan and non-clan members. More details concerning both the institutional features of the traditional exam system and of the modern education system are included in the appendix (Appendix D and Appendix E). III. DATA AND MEASUREMENT Table A-1 provides summary statistics of all the variables used in the paper and their data sources. Below we focus on the underlying logic of our independent variable, migrant-native cultural distance. A Independent Variable: Migrant-Native Cultural Distance Our independent variable is the cultural distance between migrants and natives. We rely on surname data to construct our measure. To be specific, we use differences in the surname mix to proxy for the cultural distance between migrants and natives: MNCD i = 1 normalized isonomy N,MN,i, (1) where normalized isonomy N,MN,i = S k P k,n,ip k,mn,i S k P k,n,i 2 S k P k,mn,i 2. S is the number of surnames in the two groups. P k,n,i and P k,mn,i are the relative frequencies of surname k within natives and within the entire population including natives and migrants. 4 The isonomy between the native population and the entire population, S k P k,n,ip k,mn,i, measures how likely any individual randomly drawn from within natives bears the same surname as one drawn from within the entire population. We normalize it with the isonomy of the native population, S k P k,n,i 2, and the isonomy of the entire population, S k P k,mn,i 2. MNCD captures how culturally dissimilar natives and migrants were. Figure 1 illustrates migrant-native cultural distance in the Lower Yangzi. Our approach is in line with Bai and Kung (2011, 2015); Li (2011); Spolaore and Wacziarg (2009). Li (2011) uses surname distances between pair of countries or regions at a given time to measure multilateral genetic and cultural distance. Following Du et al. (1997), Bai and Kung (2011) and Bai and Kung (2015) use isonomy (similarity in surname distribution between any 4 In practice, we extract migrant-native cultural distance from the distance in the surname distribution of a county s population before and after the rebellion, with the assumption that the surname mix of the natives remained relatively stable during that period. It is clear that the total population of natives declined after the rebellions, but as long as the proportion of each surname population to the total population did not change, our assumption remains valid. 6

8 Figure 1: Migrant-Native Cultural Distance pair of population) to approximate genetic and cultural distance across regions. They show that this surname-based measure is strongly correlated to a measure of genetic distance based on the frequency distribution of the A, B and O alleles of the ABO gene at the province level. They also find that surname-based measure is strongly correlated to a measure of cultural distance based on dialects. Similar to Spolaore and Wacziarg (2009), they find that the smaller genetic or cultural distance to the technological frontier from a region, the faster the technology diffused to that region and hence faster growth. In this paper, we adopt the same measure as in Bai and Kung (2011); but instead of using isonomy between two regions, we use isonomy between before-migration population (natives) and after-migration population (natives and migrants) to proxy for the consanguinity between natives and migrants. We do not have data on which surnames were associated with migrants but it is generally the case that migrants as a group were different to natives in terms of surname distribution, especially when they came from far away. To obtain the surname distribution of a county before migration, we hand-collect data from county chronicles (a.) name lists of civilians who died during the rebellion , (b.) exam degree holders ( ) (c.), surnames of chaste women, (d.) surnames of their husbands if they are also recorded. The number of records for 7

9 each county ranges from 800 to To obtain the surname distribution of a county after migration, we use the following sources: (a.) surnames of dead soldiers ( ) and (b.) college students born in that county who graduated between 1900 and The number of surnames from the above sources ranges from 500 to 2500 per county. More details can be found in Appendix B. We draw surnames of individuals from a wide range of social backgrounds to improve the representativeness of the surname sample. One concern might be that these samples seem too small to correctly estimate the true surname distribution of population if each surname accounts for a small fraction of population. However, this is not the case for China. In each county the largest few surnames each accounts for more than 5% of the population. To correctly estimate surname distribution of population at least for the largest few surnames, one needs a population sample of as small as a few hundred. For the six counties we indeed have a small sample problem, we do not include them in most of our regressions. As counties with a small sample are not random, we impute our outcome variable for those six counties, and run regressions on the sample including them as well. One way to check the validity of our measure is to cross-check with measures reflecting cultural or ethnolingustic devisions. One indicator of cultural devisions in the Lower Yangzi is linguistic enclaves. Before the rebellion, almost the entire lower Yangzi spoke Wu. After the rebellion, migrants settled in this area, giving rise to thousands of Mandarin-speaking villages and communities (Huang, 2004; Cao, 2006; Simmons et al., 2006). In Figure 2, we mark counties with linguistic enclaves where Mandarin (guan hua) is used. As shown on the map, counties with some of the highest values of MNCD harbor linguistic enclaves even today. This enhances our confidence in the validity of our measure. Ideally, we would also like to construct a weighted fragmentation index that takes into account whether individuals with the same surname to be both natives, both migrants, or one native and one migrant. The fractionalization of the population comes down to dissimilarity of options preferred by each other. Rather than to simply stipulate that options are either similar or dissimilar, (Bossert et al., 2003) propose alternative frameworks that permit more degrees of similarity between options. A generalized index of fractionalization is described in (Bossert et al., 2011). Drawing on the insights from Bossert et al. (2003), Alesina and Ferrara (2005) and Caselli and Coleman (2013), we can assume the distance between two individuals with the same surname, if one is a migrant and the other is a native, to be positive; and the distance between two individuals with the same surname, both being natives or being migrants, to be zero. Unfortunately, without individual-level or surname-level data on migrant-native status, our ability to operationalize this index with our data is limited. B Control Variables To account for other factors shaping modern education, we include in the baseline controls primary schools rate in 1880, population size and urbanization rate. Culturally dissimilar migrants 8

10 Figure 2: Mandarin Linguistic Enclaves in the Lower Yangzi (Wu-Speaking) Sources: Cao (2006) might be selected into places with economic conditions that are not in favor of public goods provision and schooling. So in the full set of controls, we include ruggedness, share of arable land, agricultural suitability, distance to the Yangtze River, distance to the Grand Canal, distance to the provincial capital and distance to Shanghai to capture other differences in economic conditions between counties. For robustness, we account for initial conditions the number of charitable organizations by 1850, population and population density in 1820, and measure of the impact of war battle exposure (months), % of elderly and youth (under 20 or over 40), % of adult men (between 20 and 40) and a measure of differences in human capital between migrants and natives which we call the human capital shock. We infer that natives who were able to set up more charitable organizations have higher social capital, which is likely correlated with both the type of migrants they admit and retain, as well as with their own ability to provide public education. We also discuss other potential shocks to education, such as missionary activities, measured by the log of one plus communicants per 10,000, and temple conversion, measured by the log of one plus number of temple-converted schools. We expect both variables to be positively associated with our dependent variable. IV. BASELINE RESULTS We use an OLS model to estimate the impact of migrant-native cultural distance on the number 9

11 of public primary schools: #public primary schools per 10,000 persons i = α + βmncd i + X i Ω + ɛ i. (2) The dependent variable #public primary schools per 10,000 persons is the number of public primary schools per 10,000 persons right after the educational reform. 5 MNCD i is the migrantnative cultural distance in County i. MNCD exclusively focuses on the cultural distance between migrants and natives two groups with no history of shared governance. 6 X i Ω are a vector of county-level controls. ɛ i is a disturbance term. Table 1 summarizes estimates of the effect of migrant-native cultural distance on public primary schools. With all controls, a one-standard-deviation of MNCD reduces the number of public primary schools by approximately 0.18 school per 10,000 persons, which is equal to a fifth of the mean or 40% of the standard deviation. We show an unconditional regression of MNCD on primary schools during the decade of in Column 1. The relationship is both negative and significant. In Columns 2 and 3 we add population and urbanization rate sequentially. In Alesina et al. (1999), a larger population means greater economy of scale to provide public goods, but a higher transaction cost in raising taxes. Urbanization may enhance the economic return of education, affecting the demand side of education. In Column 4, we include basic education access in We interpret this as a measure of the stock of human capital in an area, and as a summary statistic of those slow-moving components in local culture and institutions that shape the decision to receive education in the long run. By isolating the influence of past educational achievement under the private education system, we are one step closer to focusing on the impact of MNCD on public goods provision. From Column 5 to Column 10, we introduce geographic controls such as ruggedness, share of arable land and agricultural suitability, distance to the Grand Canal, distance to the Yangzi River, distance to Shanghai, and distance to the provincial capital. 7 Share of arable land and agricultural suitability can proxy the opportunity cost of receiving modern education. Distance to the Grand Canal and distance to the Yangzi River are used to proxy the market potential and access to trade. Distance to the provincial capital is included to account for the reach of provincial government or state capacity. Shanghai, which became a treaty port as early as 1845, was exposed to rapid modernization and industrialization. We control for distance to Shanghai to account for the spillover effects of Shanghai on the rest of the region. The coefficient estimate of MNCD in Column 1 (-0.21) with no control is of similar magnitude to that in Column 10 (-0.18) with all controls, when there is a sizable increase in R 2 (from to 0.399). 5 Data are from the 1907, 1908 and 1909 Census. Those are the only censuses in the decade of 1900 that contain information on schools. 6 Dippel (2014) stresses the role of the history of shared governance in the discussion of ethnically and linguistically fragmented jurisdictions having poorer economic performances. 7 Nanjing for Jiangsu, and Hangzhou for Zhejiang. 10

12 Table 1: The Impact of of Migrant-Native Cultural Distance: Main Specification (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Dependent variable: #public primary schools per 10,000 persons MNCD (0.051) (0.052) (0.052) (0.058) (0.059) (0.061) (0.067) (0.060) (0.059) (0.051) (0.041) Log population (0.086) (0.091) (0.085) (0.087) (0.093) (0.107) (0.113) (0.107) (0.108) (0.092) Urbanization (0.003) (0.003) (0.002) (0.002) (0.003) (0.003) (0.003) (0.003) (0.003) Log primary enrollment (0.264) (0.272) (0.264) (0.310) (0.296) (0.289) (0.263) (0.260) Ruggedness (0.040) (0.064) (0.077) (0.078) (0.084) (0.068) (0.041) %Arable land (0.358) (0.407) (0.430) (0.502) (0.428) (0.387) Agricultural suitability (0.045) (0.047) (0.041) (0.044) (0.039) (0.037) Dist. to Grand Canal (0.328) (0.361) (0.369) (0.400) (0.347) Dist. to Yangtze (0.130) (0.121) (0.119) (0.099) Dist. to Shanghai (0.001) (0.001) (0.001) Dist. to provincial capital (0.001) (0.001) Observations Adjusted R Notes: The table reports the impact of migrant-native cultural distance on the number of public primary schools in the decade of The unit of analysis is a county in Republican China. All baseline controls are included in Column 4: the natural log of population, urbanization rate and the natural log of primary school enrollment in Both baseline controls and geographic controls are included in Column 10. Column 11 includes six additional observations in which MNCD is imputed. Robust standard errors are included in all specifications. p < 0.10, p < 0.05, p <

13 This assures us that selection on unobservables are likely limited. 8 In Column 11 we add six counties with imputed values of MNCD to the sample. Our coefficients of interest remain stable throughout the columns. The coefficient estimate in Column 11 is somewhat smaller. We attribute this to the addition of six counties with imputed values of MNCD resulting in an increase in measurement error. We use Column 4 as our baseline for the rest of the paper. We next show how MNCD compares to measures of population heterogeneity. We use the same surname data to construct the traditional fractionalization index and two polarization indices (See Appendix G). In Table 2, we estimate the effects of MNCD, fractionalization and polarization on public primary schools. Our main finding is that MNCD has a strong and positive effect on public primary schools, and neither fractionalization nor polarization in the entire population has a statistically significant effect. The traditional fractionalization index is positively correlated with the number of public primary schools per 10,000 persons (Col. 1-3), once MNCD is controlled for. This suggests that once partialling out the effects of the cultural distance between migrants and natives, the fractionalization of the population does not necessarily reduce public goods provision. The coefficient estimates of the polarization indices are negative across the columns (Col. 4-9). By comparing MNCD to the polarization index adjusting for intergroup distances between surname groups (Col. 7-9), we find that MNCD can reduce both the statistical significance and magnitude of the coefficient estimate of the distance-based polarization index. From Column 7 to Column 8, the coefficient estimate of polarization of the entire population moves from (the p-value is 0.138) to (the p-value is 0.269). In face of other measures of population heterogeneity, the effects of MNCD largely remain. This first suggests that MNCD likely captures an important component distinct from what is encapsulated in the fractionalization and polarization indices. Secondly, MNCD likely shares a few traits in common with polarization. And they both have negative effects on public primary schools. Third, I can also infer that the history of shared governance mitigates the effects of cultural distance on local public goods provision. Likely by taking into account the history of shared governance, MNCD outperforms polarization in explaining outcomes of public primary schools. Our interpretation is that the cultural distance between previously detached groups is a more important type of cultural distance. Unfortunately, given the nature of the betweensurname-group distance measure we use (see Appendix G), we can only draw a tentative conclusion about the mitigating role of the history of shared governance on the negative effects of the cultural distance between groups. 8 Oster (2014) formalizes this approach. The results of this analysis suggest that the ratio of selection on unobservables relative to selection on observables has to be five times larger to explain away my results. Based on the reasoning outlined by Altonji et al. (2005) that unobservables should not be more important than observables in explaining the treatment, it is highly unlikely that unobservables are biasing my results. 12

14 Table 2: MNCD, Fractionalization and Polarization (1) (2) (3) (4) (5) (6) (7) (8) (9) Dependent variable: #public primary schools per 10,000 persons MNCD (0.056) (0.059) (0.056) (0.072) (0.052) (0.066) FRAC (0.012) (0.011) (0.012) Native FRAC (0.015) POL (2.851) (2.664) (3.539) Native POL (1.716) POL DIST (0.109) (0.106) (0.155) Native POL DIST (0.386) Baseline controls Y Y Y Y Y Y Y Y Y Geographic controls Y Y Y Y Y Y Y Y Y Observations Adjusted R Notes: The table reports OLS results of the impact of fractionalization and polarization on public primary schools. The unit of observation is a county in Republican China. Robust standard errors are used in all specifications. p < 0.10, p < 0.05, p < 0.01 V. ROBUSTNESS CHECKS A Subsamples We first check if our results are robust to the omission of outliers. Table 3 provides evidence that outliers do not have a substantial impact on our results. In Column 2 we exclude counties with extreme values of MNCD. Column 3 excludes counties with extremely large human capital shocks from the sample. Column 4 drops Shanghai. Coefficients in Columns 3 and 4 are fairly comparable to those in the baseline. The coefficient of MNCD is slightly larger in Column 2. This indicates possible attenuation bias due to measurement errors in MNCD. Our measurement of MNCD may be particularly poor for those outliers, and MNCD may become more sensitive to sampling errors in the range of large values. In such cases, removing those observations with mis-measured values should improve our estimation. B Initial Conditions Public goods provision depends on the level of social capital. At the same time, higher social capital within natives could imply more exclusivity, which could result in fewer migrants, and especially, fewer migrants who disagree with values possessed by natives. To check if social capital drives both MNCD and public primary schools, we explicitly include initial social capital 13

15 Table 3: Robustness: Subsamples (1) (2) (3) (4) Dependent variable: #public primary schools per 10,000 MNCD (0.051) (0.074) (0.056) (0.051) Baseline controls Y Y Y Y Subsamples Full sample MNCD outliers Human capital outliers Shanghai Observations Adjusted R Notes: The table reports the impact of migrant-native cultural distance on public primary schools during the decade of on various subsamples. The unit of observation is a county in Republican China. Column 1 provides benchmark results from Column 10 of Table 1. Column 2 excludes three counties with the highest MNCD (MNCD>5.25). Column 3 excludes counties with the largest decline in human capital (Human capital-after minus Human capital-before is less than -0.1). Column 4 excludes the important treaty port city Shanghai. Robust standard errors are used in all columns. p < 0.10, p < 0.05, p < 0.01 Table 4: Initial Conditions Dependent variable: #public primary schools per 10,000 persons (1) (2) (3) (4) (5) MNCD (0.051) (0.052) (0.055) (0.053) (0.063) #initial charities (0.006) (0.006) Initial population (0.239) (0.329) Initial pop. density (0.259) (0.278) Baseline controls Y Y Y Y Y Geographic controls Y Y Y Y Y Observations Adjusted R Notes: The table reports reports OLS results of the impact of MNCD on public primary schools, accounting for initial conditions. The unit of observation is a county in Republican China. Initial # charities are number of charities before the Taiping Rebellion. Initial population and initial population density are population and population density in All specifications include baseline controls and geographic controls. Baseline controls include logged primary enrollment rate in 1880, urbanization rate and logged population. Geographic controls include ruggedness, share of arable land, agricultural suitability, distance to the Grand Canal, distance to the Yangtze River, distance to the provincial capital and distance to Shanghai. Robust standard errors are used in all specifications. p < 0.10, p < 0.05, p <

16 among the natives in our regression, proxied by number of charitable organizations in To overcome endogeneity, we use the number of charitable organizations before the mass migration. In addition, initial population size can contain crucial information about the socioeconomic traits of the natives. So we also include initial population size or initial population density in our regression, and find that initial population size is positively correlated with the number of public primary schools per 10,000 in the 1900s. C War-Related Conditions The Taiping Rebellion was undoubtedly a major blow to the region. Other than bringing in migrants with cultural dissimilarity with natives, the rebellion likely had an independent effect on schools by affecting infrastructure, income and the demographics. Below we carefully evaluate the overall impact of war on primary schools, as well as the specific effects of the Taiping Rebellion on the human capital stock and the demographic profile of a county. We show coefficient estimates of MNCD partialling out the other effects of war, as well as coefficient estimates of those variables without MNCD. In the next section, we propose an instrumental variable strategy to establish the causality going from cultural distance to primary schools. Battle Exposure As mentioned in Section II.A, war could have lingering consequences several decades after. The scale of damage can be a function of battle exposure. We measure battle exposure by the number of months a county was exposed to war. Overall, we find no evidence that battle exposure had an impact on the number of public primary schools fifty years later (Col.2 & 3). Demographic Shock War and migration could have affected schools by altering the demographic structure. Population tend to rebound rapidly after major disturbances (Davis and Weinstein, 2002), resulting in a youthful population. Migrants tend to be younger, male. If a larger number of migrants flock into a county, who are systematically younger, from the supply side, education can become more affordable in the short run, due to lower dependency ratio, but from the demand side, there could be less demand for education if opportunities for unskilled work are abundant. We include both the %elderly and youth and %adult men (aged 20 to 40) 9 During the period we study, charitable organizations were mostly funded by local communities. 15

17 Table 5: War-Related Conditions Dependent variable: #public primary schools per 10,000 persons (1) (2) (3) (4) (5) (6) (7) (8) (9) MNCD (0.051) (0.052) (0.067) (0.053) (0.067) (0.077) Battle exposure (0.012) (0.011) (0.012) (0.011) %elderly and youth (0.034) (0.039) (0.037) (0.033) %adult men (0.026) (0.028) (0.031) (0.027) Human capital shock (1.250) (1.209) (1.350) (1.365) Initial conditions N N N N N N N N Y Inventions in education N N N N N N N N Y Baseline controls Y Y Y Y Y Y Y Y Y Geographic controls Y Y Y Y Y Y Y Y Y Observations Adjusted R Notes: The table reports reports OLS results of the impact of war on public primary schools. The unit of observation is a county in Republican China. Battle exposure is measured by month. % elderly and youth refers to those under 20 or over 40. % adult men refers to men between 20 and 40. Human capital shock is the difference in human capital between natives and the entire population including natives and migrants. All specifications include baseline controls and geographic conrtrols. Robust standard errors are used in all specifications. p < 0.10, p < 0.05, p <

18 in Columns 4 and 5, and we do not find a statistically significant effect of either variable. Human Capital Shock Human capital could be another channel through which the Taiping Rebellion affected the long-run prospects of a county. Even though migrants and natives had little contact before the settlement of migrants, some selection could be on the amount of human capital migrants had. In the event that migrants simultaneously posed a cultural shock and a human capital shock to the native population, the human capital shock may be a confounder. We define a human capital shock as the difference between migrant and native human capital (See Appendix H for variable construction details). When the migrant human capital stock is higher than native human capital, we conclude there was a positive human capital shock. In Columns 6 and 7, we control for the difference between migrant and native human capital. We find no effect of differences in human capital on schools. However, once MNCD is added to the regression, human capital shock attains a positive coefficient which is consistent with our prior. The advantage of having migrants with high human capital on school formation is likely partially offset by the cultural distance between migrants and natives. D Interventions in Education Missionary Activities Christian missionaries came to China in the 19th century to spread Christianity. In the process, they also built a large number of schools. Compared to secondary education, however, primary education was not affected to the same degree by local missionaries (Bai and Kung, 2014). Demand for public or semi-public modern primary education, may still have been affected by long-standing missionary activities. For example, if church-sponsored secondary schools already existed in the area before the campaign for modern education, it might increase demand for modern primary education through a complementarity mechanism. Due to the earliest missionary expansion and the Taiping Rebellion being concurrent events, we cannot rule out the possibility that a hostile native-migrant relationship could deter missionaries, or that migrants are more likely to settle in areas with missionaries, for aid and help. We include number of communicants per 10,000 as a rough proxy for missionary activities. As predicted, the density of communicants has a positive effect on public primary schools, but the effect is not statistically significant (Col. 2). The coefficient estimate of MNCD remains very similar to baseline estimates. Temple Conversion In the first few decades of the 20th century, government closed tens of thousands of Buddhist or Taoist temples and took over temple assets to support modern education. Two million Buddhist and Taoist temples are estimated to have closed in late Qing. At the time, they owned about 16 million houses, 13,000 square kilometers of land and millions teal of silver altogether (Xu, 2010). In Column 3, temple conversion is positively associated with the density of public primary schools. The coefficient estimate of MNCD slightly declines, suggesting that temple conversion might be a channel for MNCD to impede the establishment of public primary schools. 17

19 Table 6: Interventions: Missionary Activities and Temple Conversion Dependent variable: #public primary schools per 10,000 persons (1) (2) (3) (4) (5) MNCD (0.051) (0.047) (0.053) (0.053) (0.068) Missionary activities (0.095) (0.085) (0.082) Temple conversion (0.085) (0.085) (0.084) Initial conditions N N N N Y Baseline controls Y Y Y Y Y Geographic controls Y Y Y Y Y Observations Adjusted R Notes: The table reports OLS results of the impact of MNCD on public primary schools, accounting for interventions in education. The unit of observation is a county in Republican China. Missionary activities is measured by the log of number of communicants plus one. Temple conversation is measured by the log of number of one plus temple-converted schools. Baseline controls include logged primary enrollment rate in 1880, urbanization rate and logged population. Geographic controls include ruggedness, share of arable land, agricultural suitability, distance to the Grand Canal, distance to the Yangtze River, distance to the provincial capital and distance to Shanghai. Robust standard errors are used in all specifications. p < 0.10, p < 0.05, p < 0.01 VI. INSTRUMENTAL VARIABLE STRATEGY A Construction of the Instrument We have provided evidence that selective migration was as unlikely as was self-sorting after the arrival of the migrants. Selective migration refers to migrants and natives make decisions on entry and acceptance based on their cultural proximity. Nevertheless, the observed migrantnative cultural distance might still be correlated with unobserved characteristics of the native or migrant population, or with unobserved characteristics of the county of destination or county of origin. To sidestep omitted variable bias, we introduce an instrumental variable based on the pre-existing cultural distance between the native population and the population just outside of the Lower Yangzi ( nearby population ). 10 We use the following equation to construct a surname-based measure of the pre-existing cultural distance between the native population and the nearby population: Pre-existing native-nearby culture distance i = 1 normalized isonomy native,nearby,i, (3) 10 The nearby population refers to residents in Zhejiang and Jiangsu Province excluding the Lower Yangzi. 18

20 Table 7: Instrumental Variable Analysis: Pre-existing Native-Nearby Culture Distance (1) (2) (3) (4) (5) (6) (7) (8) OLS IV OLS IV IV IV IV IV Second Stage #public primary schools per 10,000 persons MNCD (0.051) (0.149) (0.058) (0.183) (0.173) (0.155) (0.156) (0.154) Adjusted R First Stage Dependent variable: migrant-native cultural distance Native-nearby culture distance (0.420) (.477) (0.419) ( 0.388) ( 0.399) (0.375) First-stage F Statistic Human capital shock N N N N N N N Y Battle exposure N N N N N N N Y Fractionalization N N N N N N Y Y Initial social capital N N N N N Y Y Y Pop N N N N N Y Y Y Georgraphic controls N N N N Y Y Y Y Baseline controls N N Y Y Y Y Y Y Observations Notes: The table reports IV estimates. The instrument is native-nearby cultural distance. The unit of observation is a county in Republican China. Fractionalization includes both within-native fractionalization and overall fractionalization. First-stage F statistic is Kleibergen-Paap rk Wald F statistic. Robust standard errors are used in all specifications. p < 0.10, p < 0.05, p <

21 where normalized isonomy native,nearby,i = S k P k,native,ip k,nearby S k P k,native,i 2 S k P k,nearby 2.S is the number of the same surnames in the two groups. P k,native,i and P k,nearby are the relative frequencies of surname k within natives and within the nearby population. For the nearby population, we use the proportion of each surname to the population total in the 2005 Population Census to proxy for P k,nearby. The denominator measures how likely any individual randomly drawn from within natives bears the same surname as one drawn from within the nearby population. The variable, native-nearby cultural distance ( NNCD ), is intended to capture the cultural dissimilarity between the native population and the nearby population. The intuition behind the instrument is that natives are more likely to be very different from the incoming migrants, if ex ante, natives are more different from all prospective migrants. I treat the nearby population as the pool of prospective migrants. This is a reasonable assumption as the vast majority of migrants in the Lower Yangzi after the war are found to have originated from that area (Cao, 1998; Cao and Li, 2000; Ge, 2002a; Liu, 2012; Zhe and Zhe, 1896). The cultural distance between natives and the pool of prospective migrants is independent of the Taiping Rebellion. B IV Results Table 7 compares six IV specifications. We run our regressions with no controls in Columns 1 and 2. The first stage is slightly above 7. The IV estimate is -0.25, only slight larger than the OLS estimate in Column 1 (-0.219) in terms of magnitude. We add baseline controls in Columns 3 and 4. In Column 5, we add geographic controls, resulting in an IV estimate of We then add initial conditions, fractionalization and war-related conditions sequentially from Column 6 to Column 8. IV estimates in those specifications are highly comparable ranging from to Our first-stage F statistics are not particularly high, but this is likely due to the small sample size. The first-stage F statistics do improve when MNCD outliers are excluded, possibly due to improved linearity. We also show reduced-form estimates in Table A-2. Our instrument is negatively correlated with the density of public primary schools in specifications. In Columns 1, 5 and 6, the coefficient estimates drops slightly below the conventional cutoff of statistical significance, with a p-value of Across the columns, IV estimates are slightly larger than the OLS estimates for the same specifications. We attribute the discrepancies partly to the measurement error in our migrant-native cultural distance variable. As our surname sample is on the small side for some counties, we may have a lot of sampling error in determining the relative frequency of a surname in the native or overall population. In addition, when constructing our measure of MNCD, we assume people with different surnames in the same location, had similar exposure to the war, and had similar recovery growths in population after the war. While this assumption is unlikely systematically violated, our measure can suffer measurement error and be noisy. In comparison, our instrument uses a much larger surname sample from the 1% population census. We have reason to believe that our instrument has less measurement error with regards to the relative frequency of 20

22 a surname in a population; hence, our IV estimates do not suffer the same attenuation bias as our OLS estimates do. In addition, MNCD is partially determined by population losses during the rebellion, whereas our instrument is not affected by differential population losses during the rebellion. We control for battle exposure, but it is far from being the perfect indicator of population losses. 11 IV estimates can differ from OLS estimates as they are unaffected by the magnitude of population losses. 12 VII. MECHANISMS: THEORY AND SUGGESTIVE EVIDENCE Our results suggest cultural differences between migrants and natives have a negative impact on public goods provision. In this section, we provide suggestive evidence on possible mechanisms. The Lower Yangzi, in spite of being more developed than the rest of the country, remained highly agrarian at the time. The average urbanization rate was merely 12%, which means the vast majority of people lived in the countryside. In the sixty counties we study (fifty-four in the main sample), every county comprises hundreds of villages. Many natives in those villages typically have lived there for hundreds of years. Close kinship ties ensured that levels of trust between villagers were relatively high, and this allowed them to collaborate in the provision of public goods. In some villages all the inhabitants were from the same linage, in which case, most of them would share the surname; other villages had a few lineages. Many of the public goods, such as security and education, were provided by and within the clan. But some of those goods were provided by the gentry to the whole village in the form of private donations. The long tradition of village life, which went back centuries, if not millennium, constituted a deep institutional memory of how to deal with problems such as the provision of local public goods. Both natives and migrants (back in their own hometowns) had adapted to this stable and slow-moving environment. So when migrants first showed up in the villages of the natives, they had to sort out an arrangement in which their coexistence with natives would be possible; a few decades after, migrants and natives were confronted with a new task: to build modern schools for their next generation. Based on theoretical and empirical research, there are several ways migrant-native cleavages can affect public goods provision and prevent them from building modern schools together: first, differences in preferences between migrants and natives would mean a lower chance for migrants and natives to reach a consensus on whether to provide a public good or the best way to provide that good. Second, mutual dissatisfaction, which is often a function of the cultural 11 Despite scholarly efforts to estimate population losses due to the rebellion, the actual damage remains unknown (Cao and Li, 2000; Cao, 1998). 12 Population losses could have an independent effect on primary schools, and MNCD could be picking up the effects of population losses in addition to the effects of the cultural distance between migrants and natives. Also, although population losses were substantial for most counties in the Lower Yangzi, there were a few exceptions. As places with little to none exposure to the war are never-takers, the local average treatment effect is estimated on counties with actual in-flow migration after the rebellion. 21

23 distance between migrants and natives, can block any bilateral collaboration and negotiation. For example, when a village leader originates from the group of migrants, natives would decide to actively oppose whatever policies he initiates. Esteban et al. (2012a) shows empirically that ethnic polarization, which accounts for distances between groups, will influence conflict if the prize is public. 13 And a closely related scenario is that a leader from the side of natives (or migrants) indeed looks out for the best interest of natives (or migrants), and at the expense of the other. When a leader from the side of natives (or migrants) takes advantage of the other side, often in the name of public interest, it is to be expected for the other side to oppose expropriatory policies proposed by the leader. We find qualitative evidence in line with the mechanisms laid out above. First, villagers found it difficult to raise taxes or use clan or temple assets to establish modern schools, when they were from different dialectal and cultural background, due to mutual misunderstanding or outright disagreement between migrants and natives. Second, migrants opposed the policies put forward by natives. Tian and Chen (2008) document cases where migrants into rural areas refused to pay county taxes designated to finance upper-primary schools on the grounds that the schools only serve the rich in the cities and towns. In this example, we see both migrants being victims to expropriatory polices, and a strong identity held by migrants reflected in their statement. Third, native-migrant conflicts had a direct impact on public goods provision by intervening with the day-to-day operation of a village. Community leaders were reluctant to build public modern schools in the midst of frequent native-migrant conflicts. lowered the ability of a community to perform effective decision-making in the provision of public education. Below we present quantitative evidence to corroborate our analysis. A Evidence from Types of Schools We exploit a feature of the school system in early 20th century China: the financing of lowerprimary and dual-primary schools differed from that of upper-primary and secondary schools. Overall, the financing of different types of educational institutions after 1905 was parallel with that of the traditional system. The role of central and provincial governments was limited to financing universities, students studying abroad, and secondary schools (including teacher training schools) at provincial capitals. 14 County governments financed primarily upper-primary schools, which were mostly located in cities and towns, with a combination of county tax receipts, business tax surcharges, the reallocation of endowments from traditional schools, and private contributions by local elites (Chaudhary et al., 2012). Village communities worked to finance 13 Esteban et al. (2012b) develops a theory of conflict across groups allowing for public and private prizes. A leadership position is an example of a public prize. In our context, possible sources of dissatisfaction, or even conflict, include a lack of trust in migrants or a loss of pride due to losing the election as natives. The lack of trust can arise from the perception of the village leader being susceptible to predating on the interest of natives. 14 The decentralization of fiscal authority after the Taiping Rebellion left the majority of tax revenues to county-level authorities. So the central state had very limited resources to finance primary schooling at the local level. 22

24 dual-and-lower-primary schools in rural villages. A frequent practice was for community leaders to transform clan schools and other properties into modern dual-and-lower-primary schools, and to cover the day-to-day expenses with local taxes and private donations. Those schools received very little financial support from the county government and its affiliates. 15 Figure 3 lists distribution of financial sources for different types of schools in Hangzhou County (Zhang, 2008). According to Figure 3, lower-and dual-primary schools had a higher share of their budget made up by local funds. Another institutional feature we exploit is that Chinese villages are highly autonomous and selfgoverned. Constrained by state capacity, the reach of the central government tended to end at the county level (Qu, 2003, pp.11-15, , ).At the county level, again, each country comprised of a large number of villages, making it difficult to project power into those villages. The self governance of villages has a long tradition in China (Fei, 1939, 1992; Kung-Chuan, 1967; Shi et al., 1988).In an environment of self-governance, migrant-native cultural distance might manifest itself most forcefully in the outcomes of collective decision-making processes, as there will not be countervailing forces to their decisions. With these two institutional features in mind, we can derive the following testable implication: ceteris paribus, MNCD should have a greater impact on lower-primary and dual-primary schools than on other types of schools. Fortunately, the educational census ( ) reports number of schools and schools separately for five types of schools: secondary schools, upper-primary schools, dual-primary schools and lower-primary schools and pre-schools. So we can empirically test how MNCD affects the density of different types of schools. We begin our analysis by running a simple regression of county government spending on density of lower-primary and dual-primary schools. Panel A of Table 8 suggests that government funding is strongly correlated with upper-primary and secondary schools rate (Col. 3, 4), but not with lower-primary and dual-public primary schools (Col. 1, 2). These are highly consistent with the information contained in Figure 3: the county government was not a major contributor to the budget of the lower-primary and dual-primary schools, but provided funding to secondary schools and upper-primary schools. It is not surprising that both upper-primary school and secondary schools increase in county government spending on education, while there are no such relationships for lower-primary or dual-primary schools. When we replace county government spending with migrant-native cultural distance in Panel B of Table 8, we find the type of schools with coefficients that are significant, flipped. We find MNCD has a strong impact on schools at lower-primary and dual-primary schools, but not on schools at upper-primary and secondary schools. This is consistent with our testable implication that MNCD should matter the most for the setting of self-governance given the period we examine, both villages and townships were self-governed, and lower-primary and dual- 15 Schools also charged tuition to supplement other sources of funding. Tuition accounted for 10%-20% of school budgets in

25 Commu nity or industry raised 13% Secondary Schools Tuition and fees 2% Commu nity or industry raised 6% Upper-Primary Schools Tuition and fees 8% County or townshi p raised 85% County or township raised 86% Tuition and fees 2% Dual-Primary Schools Commu nity or industry raised 56% County or township raised 42% Lower-Primary Schools Tuition and fees 7% Commu nity or industry raised 86% County or township raised 7% Figure 3: The Makeup of the Budget of Different Types of Schools primary schools were determined, established and financed locally. When migrants and natives could not get along, they could face severe challenges in solving important and urgent issues including establishing modern schools for their children. B Evidence from Timing Having showed the differential impact of MNCD on different types of schools in the 1900s, we next explore the time-varying impact of MNCD as funding responsibilities over basic education changed over time. This task is complicated by the fact that public primary schools did not exist prior to So we instead look at access to basic education over time. We exploit two structural breaks in funding responsibilities over basic education. The first structural break came around in Prior to 1905, individual households or extended families were responsible for basic education (as well as for advanced education). There is no evidence for either village taxes, government aid, or publicly funded basic education. As basic education was essentially a private good before 1905, exposure to basic education should not vary in MNCD. The second structural break kicked in close to the end of the 1920s. From then on, the fiscal authority over lower-primary and dual-primary schools migrated to upper-level governments. In 24

26 Table 8: Schools Government Funding, Migrant-Native Cultural Distance and the Density of Lower-primary Dual-primary Upper-primary Secondary Panel A. Government Funding: By School Type Government spending on education (0.979) (0.338) (0.073) (0.053) Baseline controls Yes Yes Yes Yes Adjusted R Panel B. Migrant-Native Cultural Distance: By School Type MNCD (0.042) (0.021) (0.005) (0.003) Baseline controls Yes Yes Yes Yes Observations Adjusted R Notes: Panel A reports the impact of government spending on then density of different types of schools (#schools per 10,000 persons). Panel B reports the impact of migrantnative cultural distance by school type. The unit of observation is a county in Republican China. Robust standard errors are included in all specifications. p < 0.10, p < 0.05, p < 0.01 the meanwhile, upper-level governments become much more autocratic over time. The combined effect of schools being funded by upper-level governments and upper governments becoming more autocratic, should render local decision making increasingly less relevant, which should yield a less economically significant coefficient of MNCD. These two structural breaks give rise to the prediction that the impact of MNCD should be the most relevant between 1905 and the end of 1920s. We test this prediction in a fully flexible difference in differences specification. Our variables of interest are interaction terms between MNCD and time period dummies: %access to basic education i,t = t β t MNCD i T imeperiod t + γ t X i T imeperiod t t +Z i, tζ + ρ t + η i + ε i, t, (4) where the year 1960 is left out as the comparison group. The dependent variable is log share of population receiving basic education in County i during time period t. X i is a vector of other time invariant controls and we allow these variables to have time-varying effects on access to basic education. Z i,t ζ is a vector of time variant controls.ρ t denotes a full set of time fixed effect and η i denotes a full set of county fixed effects. ε i,t is a disturbance term. Our time periods are defined as follows: 1820, 1850, 1880, 1900, 1910, 1920, 1930, 1940, Table 9 summarizes our results. Across the specifications, the only M N CD T imeperiod 25

27 Table 9: The Dynamic Impact of of Migrant-Native Cultural Distance: Baselines (1) (2) (3) (4) %access to basic education MNCD (0.025) (0.031) (0.030) (0.025) MNCD (0.022) (0.030) (0.029) (0.024) MNCD (0.025) (0.035) (0.037) (0.031) MNCD (0.062) (0.072) (0.076) (0.067) MNCD (0.040) (0.045) (0.046) (0.045) MNCD (0.043) (0.036) (0.037) (0.027) MNCD (0.045) (0.039) (0.040) (0.028) MNCD (0.023) (0.017) (0.019) (0.014) MNCD (0.023) (0.011) (0.013) (0.010) Log population (0.084) (0.084) County FE N Y Y Y Time period FE Y Y Y Y Observations Adjusted R Standard errors in parentheses p < 0.10, p < 0.05, p < 0.01 Notes: The table reports the dynamic impact of migrant-native cultural distance before and after the Taiping Rebellion.Column 1 only includes time period fixed effectds. Both time period effeccts and county fixed are included in all other specifications. Column 3 controls for log population. Column 4 includes the six counties with imputed MNCD. Column 3 is our preferred specification. Standard errors are clusterered at the county level. coefficients that are consistently significant are MNCD 1900 and MNCD This is highly consistent with our prediction that MNCD has the most impact on access to basic education, during the period where basic education is a public good and fiscal authority is decentralized. We begin our analysis by including only M N CD T imeperiod, time period FE. To make full use of the panel data, in Column 2, we add county FE to the regression. We find MNCD T imeperiod is negative but insignificant before 1900, and there is no pretrend. It is not the case that the counties became better or worse in providing basic education over the time. Consistent with our prediction, MNCD did not matter for the period between the end of the war (1864) and the abolition of the exam (1905), when basic education was 26

28 Figure 4: The Dynamic Impact of Migrant-Native Cultural Distance largely financed privately within clans. For , MNCD has a negative effect on schools of great economic magnitude, and coefficient estimates of interactions between MNCD and time periods drop substantially after 1920, and are no longer significant. 16 In Column 3, we add a possibly endogenous variable, log population, to the specification, and we get fairly similar estimates to Column For the decade of , a one-standard-deviation increase in MNCD is associated with 32.3% decrease (0.294*1.1) in access to basic education, relative to the effect of MNCD on schools in 1960, our omitted category. This estimate is comparable to our baseline OLS estimate in Column 4 of Table 1. In Column 4, we run the same regression as in Column 3, but on a sample including counties with imputed MNCD. The estimates are somewhat smaller, likely due to the attenuation bias posed by less well measured MNCD of the newly added counties. The differential impact of MNCD in Table 9 before and after two structure breaks, are most similar to the approach featured in Dippel (2014). Dippel (2014) finds the impact of forced coexistence on economic prosperity only emerged after 1990, when Indian reservations were given substantially more autonomy. We find the impact of MNCD only began to surface after the modern educational reform, when the responsibilities of individual households and clans in providing basic education was partly taken over by villages, and only died out after 1920, when village and small town autonomy began to be eroded by upper-governments. Evidence from the timing of MNCD kicking in and dying out suggests that the primary mechanism runs 16 access t o b asic e ducation 1910 is the average of public primary schools recorded in the 1914, 1915 and 1916 Census. 17 We would like to include time-varying urbanization rates as well, just to be comparable to the specifications in Table 1. Unfortunately, we only have urbanization for one period. 27

29 from migrant-native cultural distance through quality of collective decision-making to public primary schools. In addition, the general consistency between our panel and OLS estimates further enhances our confidence in the findings. VIII. CONCLUSION This paper uses quasi-exogenous migration to identify the impact of cultural proximity between migrants and natives on public goods provision outcomes. Our key finding is that cultural distance has an independent effect on public goods provision outcomes, conditional on the history of shared governance. In addition to our key finding, we also find partial evidence that a history of shared governance mitigates the negative effects of the cultural distance. We find that the culture distance between previously detached groups has a statistically significant effect on public goods provision, whereas the polarization measure taking into account differences between surname groups ( surname group distance ) without making any adjustment for their shared history, does not have the same effect. A most likely explanation for this is that the culture distance between previously detached groups (migrants and natives) does more damage to public goods provision than does the cultural distance between groups with a history of shared governance. A history of shared governance might have nurtured trust and increased the level of collaboration. This is consistent with Dippel s (2014) finding that a history of shared governance facilitates public goods provision. Therefore, we believe our findings are consistent with both sides of the debate as to whether ethnic cleavages or artificial jurisdictions has caused poor economic performance. Our analysis sheds light on how migrant-native cultural distance, as a key aspect of population heterogeneity, is related to the failure of educational reforms in the early 20th century. Our finding that a greater cultural distance between migrants and natives is associated with a lower density of public primary schools reveals the unique challenge faced by communities with many migrants from afar face in their attempt to modernize their education. For those communities, educational reforms proved to be incredibly challenging and frustrating, due to intense social antagonism between two groups. The under provision of modern education could prevent have prevented the accumulation of modern human capital and increased barriers to industrialization for those communities. A more general point is that cultural distance is associated with a higher cost in modernizing the governance structure in China. Following China s constitutional reforms, village communities aimed to provide a wider range of public goods, as well as to formalize its governance structure (Kuhn, 2002, Chapter 4). The failure to provide a key public good public primary schools actually reveals a deeper issue with the process of modernizing the village governance structure. The idea that low social capital can prevent effective self-governance in Chinese villages is 28

30 explored in Qian, Xu, Yao, et al. (2015). 18 Formalization and democratization of village decisionmaking following the constitutional reforms was hampered by strong social antagonism between migrants and natives, the two groups with the most mistrust for each other. Social antagonism between different groups in the village, created substantial barriers for post-1905 villages to modern its political structure and to provide a wider range public goods than before. We argue that cultural distance can affect the quality of village governance through social capital and delay the emergence of full-fledged modern village governance. Lacking the support of well-functioning local villages, Qing China made little meaningful progress in its political reforms before its collapse in While both constitutional reforms and modern school movement continued into Republican China, they still faced very similar constraints that Qing China had during its last ten years. By 1930s, modern schools eventually attained rapid growth but only at the expense of village self-governance and political decentralization (Kuhn, 2002). The stagnant growth of public primary schools in a time of decentralization parallels the experience nineteenth-century Prussia had with a decentralized education system in a linguistically polarized society (Cinnirella and Schueler, 2016). The transition to autocratic rule after 1930 seems to be consistent with Galor, Klemp, et al. (2015) which establishes the point that population heterogeneity can provide a breeding ground for autocratic rule. For those interested in the historical role of the gentry class, our paper also sheds some light on the role of gentry men in modernizing village governance in a discussion of the mechanisms linking MNCD to poor public goods provision outcomes. Gentry men were elite members of their village. Many of them were enthusiastic about making contributions to their village. Schools before 1905 relied heavily on their private donations, and remained so to a certain degree even after However, our findings most likely indicate that gentry men were not best suited to fulfill leadership roles in a modern context gentry men, because they were viewed as closely associated with their clan, encountered criticism about their impartiality; these tensions helped fuel political conflict as leadership positions were seen as public prizes by a heterogeneous population. 18 Qian, Xu, Yao, et al. (2015) find the presence of village temples, their proxy for social capital, enhances public goods provision through the channel of elections. 29

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34 Appendix A Additional Tables Table A-1: Summary Statistics Variable Mean Std. Dev. Observations Source #public primary schools per 10,000 persons b Measures of population heterogeneity: Migrant-native cultural distance a Overall diversity a Within-native diversity a Overall polarization a Within-native polarization a Instrumental variables: Native-nearby cultural distance a Baseline controls: Log(%access to basic education), b Urbanization rate, d Log population b Geographic controls: Ruggedness g % arable land e Agricultural suitability g Dist. to Grand Canal g Dist. to provincial capital g Dist. to Shanghai g Dist. to Yangzi g Initial conditions: #initial charities h Log population, b Log population density, b Impact of war: Battle exposure (months) i % adult men c % elderly and youth c Human capital shock b Interventions in education: Log (#communicants per 10,000+1) f Log (#temple-converted schools+1) j 33

35 Variable Mean Std. Dev. Observations Source Mechanisms: Government spending on education b #lower-primary schools per 10, b #dual-primary schools per 10, b #upper-primary schools per 10, b #secondary schools per 10, b For panel estimates: Log(%access to basic education) b Log population b a. Surname data sources (see Appendix B) b. Primary schools data sources (see Appendix C) b. Ge and Cao (2001) c. Yin and Tian (2009, Volumn 4), Compilation of Historical Population Statistics During the Republican Period; Ge (2002b), Household and Population Census in Zhejiang During the Republican Period. d. Yin and Tian (2009, Volumn 1), Compilation of Historical Population Statistics During the Republican Period. e. Buck and Press (1937), Land Utilization in China: a study of 16,786 farms in 168 localities, and 38,256 farm families in twenty-two provinces in China, f. Local gazetteers on religious facilities. g. CHGIS (2007) h. Liang (2001) i. Guo (1989) j. Ouyang and Zhang (2010) Table A-2: Instrumental Variable Analysis: Reduced-Form Estimates (1) (2) (3) (4) (5) (6) Dependent variable: #public primary schools per 10,000 persons Native-nearby culture distance (0.194) (0.191) (0.182) (0.184) (0.216) (0.212) Human capital shock N N N N N Y Battle exposure N N N N N Y Fractionalization N N N N Y Y Initial social capital N N N Y Y Y Pop N N N Y Y Y Georgraphic controls N N Y Y Y Y Baseline controls N Y Y Y Y Y Observations Adjusted R Notes: The table reports reduced-form estimates of native-nearby culture distance. The unit of observation is a county in Republican China. The specifications correspond to those in Table 7. Robust standard errors are used in all specifications. p < 0.10, p < 0.05, p <

36 B Data Sources for Surnames An Overview of Surname Data Sources Pre-Taiping period Post-Taiping period Deaths during the Taiping Rebellion a Exam degree holders b Diseased soldiers c College students d Sources: a: Traditional county gazetteers (pre-1949): chapter for deaths of high moral worth. 旧志 - 咸同忠烈姓名录 b: Traditional county gazetteers (pre-1949): chapter for exam degree holders. 旧志 - 选举志 (by year of degree) c: Modern county gazetteers(post-1949): chapter for deceased soldiers. 新志 - 抗战英烈和革命英烈姓名录 (by year of death) d: College yearbooks during the Republican era (by year of admission). See Hao and Clark (2014) for more details. 35

37 36 Figure A-1: Data Sources for Surnames

38 C Data Sources for Basic Education Year Region Sources The Lower Yangzi Same as surname data sources. See Some notes on surname data. The Statistical Chart of Education (Jiaoyu Tongji Tubiao) by Ministry of Education ( 教育部 ) 1907 Nation 光绪三十三年第一次教育统计图表 1908 Nation 光绪三十四年第二次教育统计图表 1909 Nation 宣统元年第一次教育统计图表 1915 Nation 中华民国第三次教育统计图表 1916 Nation 中华民国第四次教育统计图表 1917 Nation 中华民国第五次教育统计图表 1923 Jiangsu 江苏政治年鉴 The Yearbook of Politics: Jiangsu Province (1923) The Statistical Chart of Education (Jiaoyu Tongji Tubiao) by Department of Education ( 教育厅 ), Zhejiang Province ( ) 1925 Zhejiang 中华民国十四年度浙江省教育统计图表 1927 Zhejiang 中华民国十六年度浙江省教育统计图表 1929 Zhejiang 中华民国十八年度浙江省教育统计图表 1929 Jiangsu 江苏教育概览 The Overview of education: Jiangsu province (1929) The Statistical Chart of Education (Jiaoyu Tongji Tubiao) by Department of Education ( 教育厅 ), Jiangsu Province ( ) 1932 Jiangsu 民国二十一年度江苏省教育经费统计图表 1933 Jiangsu 民国二十二年度江苏省教育经费统计图表 Jiangsu 江苏省教育统计图表 Zhejiang 浙江省三年来教育概况 1947 Jiangsu 江苏省 36 年教育统计 1947 Zhejiang Education for the Last Three Years: Zhejiang province 浙江经济年鉴 The Yearbook of Economy: Jiangsu Province (1923) Jiangsu 江苏五十年 ( ) The fifty-year statistics of Jiangsu ( ) Zhejiang 新浙江五十年统计资料汇编 ( ) The fifty-year statistics of Zhejiang ( ) Figure A-2: Data Sources for public primary schools ( ) 37

39 D The Traditional Education System Prior to 1905, the primary education system was based upon Confucian classics and aimed at success in the imperial examinations. At national, provincial and county levels, highly competitive exams selected a few degree holders, and brought the individual, his clans, and communities prestige, power, and wealth through government service (Rawski, 1979, p.21). Within a community or a clan, an individual s literacy helped determine his social status, occupation and wealth. The return to passing exams generated considerable demand for privately or publicly provided traditional schooling throughout the country. On the other hand, due to commercialization in this area since the 16th century there was a growing demand for education, especially basic education. The educational system consisted of two phases: mass primary education teaching basic literacy and select students of talent, and the more advanced education drilling candidates to prepare for exams (Leung, 1994). Those who reached the threshold level in literacy to attend the exam (4,000 characters) accounted for only 1%-2% of the male population(rawski, 1979, p.96). A much higher percentage of male population, roughly 30% to 40%, acquired basic literacy (numeracy and about 1000 characters) Crayen and Baten (2010). Female literacy (2%-5%) was confined to those from elite families (Mann, 1994; Rawski, 1979). Both basic and advanced education were mainly provided privately. Children in elite households were instructed by family members to begin with (age 3-6), and by hired private tutors between age 6 and 15 (typically exam degree holders who had not been to a government position). Households of modest backgrounds pooled their resources and paid local teachers for instructions. There is no evidence that a village tax was collected, nor any aid from government was received to finance those educational instructions. Parents paid the teacher in either money or commodities. Each tutor taught 1-30 students in the tutor s own house or the village temple. Hours and schedules were flexible, adjusted to weather and season. The cost varied with the quality of instructions, and degree holders could demand a higher salary as tutors. At the age of nine or ten, decisions were made based on the observed talent of children. Families would support the talented ones to pursue exam careers, while they prepare others for various lesser occupations. Boys from families too poor to pay for schooling were not necessarily barred from the classroom. Clan schools (zu xue) were often established primarily to aid such students (Rawski, 1979, pp ). These schools were financed by contributions, a clan tax, and clan land (xue tian) with the rent going to special funds for education and exam preparation. Clan temples (zong miao) often served as classrooms. For the talented students, their future study and exam taking were fully covered by land funds. Most clan schools limited admission to kin members but exceptions were made for talented non-kin members within the community. Overall, in the lower Yangzi about 5-8% of males were supported by their kinships for their education. The central and local government in late imperial China took a hands-off approach to financing education. Local magistrates advocated setting up primary schools for the poor but there 38

40 was no record of direct funding from the government (Rawski, 1979, pp ). The education establishments with direct government funding, called government-based county and prefecture schools, were for no more than a few hundred lower degree holders to accomplish higher degrees (an allowance was provided to cover basic living costs and travel costs). There were a few exceptions to the rule: in frontier regions populated by non-han minorities, the government funded the establishment and maintenance of schools; in areas with recent exposure to war and famine, the government often helped to establish schools as a means to restoring the Confucian order (Rawski, 1979, p.89). For instance, after the Taiping rebellion, the magistrate of the county of Wujiang set up sixteen charity schools with the county budget, but those schools admitted no more than 500 students county-wide, which accounted for only 1% of school-aged children. Even so, these schools were closed after a decade because of a tight budget and the restoration of private and clan schools to a pre-war level.in most cases, such governmentinitiated charity schools only admitted 0.5%-1% of the school-aged children, or 2%-4% of the entire educated population. E The Modern Education System Traditional Modern Early childhood (4-7) Primary (7-12) Juvenile (13-17) and youth (18-25) Content Basic Chinese characters Tutored at home by family members Poetry and Confucius classics Preparing for exams (writing eight-legged essays based on Confucius classics) Early childhood (4-7) Basic Chinese characters Primary (7-12) Chinese, art, mathematics Juvenile (13-18) Chinese, art, mathematics, western science Youth (19-25) Art, western sciences, foreign languages, law and engineering Pedagogy Memorizing Memorizing; Tutored at home or at sishu by private tutors Memorizing and writing; Studied at home or in private academies Tutored at pre-schools Studied in primary schools Studied in high primary schools and secondary schools Studied in universities Table A-3: Traditional versus Modern Education. Sources: Yuchtman (2015) 39

41 Example county: County of Wu ( 吴县 ) Village Small town Lower-primary schools and dual-primary schools Upper-Primary Schools Bureau of Education 县劝学所, 教育局 City of Suzhou ( 苏州 ) Secondary Schools District-level agency 区劝学员 Figure A-3: Types of Schools and The Fiscal Authority in Charge 40

42 F The Taiping Rebellion Figure A-4: Battle Exposure G Measures of Population Heterogeneity Below we construct measures of population heterogeneity as alternative explanatory variables, mainly, the fractionalization index and the polarization index. Those indices do not contain information on migrant-native status. We compare MNCD to measures of population heterogeneity to put the explanatory power of the cultural distance between migrants and natives in perspective. G.1 Fractionalization Akin to the fractionalization measure in (Alesina et al., 1999), we use the inverse of isonomy to define fractionalization. Rather than ethnic groups, our measure relies on surnames (k). We measure the probability of randomly drawn two individuals sharing the same surname for a population at a given time: S I = Pk,i 2, (5) k 41

43 where S is the number of surnames and P k is the relative frequency of surname k, which is the proportion of the population with surname k to the population. This is a Herfindahl-Hirschman index of surname distribution. And, F RAC = 1 I. (6) A higher FRAC corresponds with a lower likelihood that any two individuals randomly drawn from a population bear the same surname (which indicate closeness in dialect, culture and even genetics). This fractionalization index treats all groups symmetrically. MNCD can change without increasing fractionalization. An example is that when people carrying a certain surname are wiped out by the rebellion, and replaced by migrants carrying a different surname, the overall fractionalization of a population remains unchanged, but MNCD can still change. G.2 Polarization Our first polarization index is taken from Reynal-Querol (2002) and Reynal-Querol and Montalvo (2005): POL = S ( i=1 1 2 P k 1 2 ) 2 P k (7) where S is the number of surnames and P k is the relative frequency of surname k, which is the proportion of the population with surname k to the population. This measure employs a weighted sum of population shares and assumes the any two groups are either completely similar or completely dissimilar. We then rely on Duclos, Esteban, and Ray (2004); Esteban and Ray (2011); Esteban, Mayoral, and Ray (2012a) to build a second measure of polarization: POL DIST = S i=1 S j=1 P 2 i P j d ij. (8) The group i here is defined as a surname group. The population share of each surname group is P i, the intergroup distance d i j. Our measure of intergroup distance is the difference in human capital between groups. This is not the perfect measure, but this is the best measure we can find given our data. A similar measure to ours is the difference in incomes between groups (Esteban and Ray, 1994) and (Aghion et al., 2005). For that reason, our polarization measure should be interpreted with caution. We report correlations between MNCD and fractionalization and MNCD and polarization (Table A-4). We find MNCD is positively correlated with overall fractionalization and polarization, but 42

44 Table A-4: Correlations Between MNCD, Fractionalization and Polarization MNCD Overall FRAC Overall POL Overall POL DIST MNCD 1 Overall FRAC Overall POL Overall POL DIST p < 0.1, p < 0.05, p < 0.01 not with within-native fractionalization and polarization. This is consistent with the nature of MNCD: it captures the relationship between migrants and natives, not the relationship between natives. The high correlations between MNCD and overall fractionalization and polarization suggest that MNCD captures crucial information in overall population heterogeneity. H Human Capital Shock Migrants do not always have the same level of human capital as natives. When their levels of human capital differ, this measure captures the resulting shock to the stock of local human capital: Human capital shock = (P k,mn P k,n )RR k (9) k where RR k is a surname-specific variable that denotes the representation of surname k among the educated elites relative to its population, i.e. RR k is the ratio of the share of k in education elites to the share of k in the total population. Supposing that natives have two surnames: Wang and Li. Each surname accounts for 50% of the population. Li s are over represented among education elites by a factor of 2, in other words, Li s are two times more likely to show up among national elites than in an average population, whereas Wang s are just as likely to be educated as is a member of the average population. For illustrative purposes, take the extreme case where all Li s die in the war. A family of Zhangs came to the village, with a RR of 0.5. The human capital shock is (50%-50%)*1+(0%-0.5%)*2+(50%-0%)*0.5=-0.5. We acknowledge that our measure of human capital shock can have measurement errors due to migrant selectivity migrants do not have to have the same capital level as the overall population with their surnames. When skilled migrants migrate to more industrialized areas, our measure can underestimate the level of their human capital. However, we do not see how this can bias our results aside from introducing an attenuation bias. Also, this sort of measurement error is going to be minor for most counties in our sample, with the exception of industrial Shanghai. Figure A-5 shows geographic pattern of human capital shocks. The human capital shock appears to be the most positive in the east, consistent with the fact that Shanghai often attracted migrants with higher human capital relative to its native population. 43

45 Figure A-5: Human Capital Shock I Evidence from Timing I.1 Pre-1900 Access to Basic Education We construct our time-varying access to basic education variable using two methods: for , we obtain primary school enrollment rates from national and provincial censuses on modern education. For , there were no primary schools in the modern sense, but a percentage of people did acquire basic education as explained in Appendix D, but data on this are generally not available. Below we explain our method in estimating pre-1900 rates of access to basic education and how it affects the validity of our panel analysis. We estimate pre-1900 %access to basic education from time-varying pre-1900 rates of collegeequivalent education (juren), college schools rate in 1947, and literary rate in While the content of provincial-exams was vastly different from modern university education, successful candidates of provincial exams were similarly at the top of the distribution of the educated. This yields a method to construct a rough estimate of the share of population with a basic education prior to We employ the following parallel projection to estimate time-varying rates of receiving basic education: %basic education access i,1947 = a + b college student per 10,000i, µ it. (10) Second, using the obtained a and b (1.72 and respectively), we project %access to basic 44