Between the 1910s and 2010, the education systems in China and India experienced remarkable growth, producing millions of skilled graduates and employing vast numbers of teachers each year. Educational spending also surged, rising from just 0.1–0.2% of gross national income in the early 20th century to 4–5% in the 21st century. However, beneath the surface of this shared expansion lie significant differences in the human capital accumulation and educational development paths, leading to divergent outcomes in inequality and economic growth.
By synthesizing a wide array of historical and educational reports and surveys, Nitin Kumar Bharti and Li Yang constructed a novel dataset to compare human capital accumulation strategies of China and India and their effects on inequality and economic development.
Key findings:
- Educational inequality is much higher in India, accounting for 25% of wage inequality in India compared to 5-12% in China. This is the result of divergent strategies in the development of their modern education systems over the course of the 20th century.
- China adopted a bottom–up approach, prioritizing quantity over quality. Early efforts focused on primary-level mass education (from the early 1900s, before communism). The focus shifted to secondary level education (during the 1960s-80s, under communism), and finally to tertiary level elite education (from the 1980s onward, in the post-communist era). It was only after attaining a high enrolment rate (>70%) in the 1950s, that it started hiring more teachers, and from the 1980s onward, it started improving teachers’ salaries.
- India implemented a top–down strategy, gradually expanding its educational system while also seeking to maintain quality. During the British Raj era, the focus was placed on secondary-level education until 1950, then it shifted to the tertiary level (in the post-colonial socialist phase), and finally to the primary level after the 1990s (post-liberalization). India’s strategy has been to attract more qualified teachers at higher salaries, instead of hiring more teachers, thereby larger pupil teacher ratio.
- Human capital institutions played a key role in shaping the long-run economic development in both countries. In British colonial India, education focused on the humanities to meet administrative needs, while China’s education system aligned more closely with fostering economic growth, particularly after the 1980s. India’s focus on humanities and accounting fuelled its service sector, while China’s emphasis on engineering and vocational training supported manufacturing growth. Nearly 25% of Chinese students at the secondary level and above are enrolled in vocational education, compared to about 2% in India.
- Paradoxically, India has a larger share of tertiary-educated graduates while still grappling with a substantial illiteracy rate. India’s neglect of compulsory primary education left much of its population trapped in low-productivity agriculture. While both countries had 62% of their workforce in agriculture in 1987/88, China reduced this to 15% by 2018, whereas India only managed to lower it to 40%.
- Additionally, India’s cultural norms have kept a larger share of its working-age population, especially women, outside the workforce. In 2018, 40% of India’s working-age population remained outside the economic workforce, compared to 23% in China.
AUTHORS
- Nitin Kumar Bharti, New York University Abu Dhabi, Paris School of Economics, World Inequality Lab
- Li Yang, ZEW – Leibniz Centre for European Economic Research, Paris School of Economics, World Inequality Lab
MEDIA CONTACT
- Alice Fauvel, Communications Manager, alice.fauvel[at]psemail.eu, press[at]wid.world
