Does an intra-household flypaper effect exist? Evidence from the educational fee reduction reform in rural China

In this paper, I test for evidence of an intra-household flypaper effect by evaluating the impact of an educational fee reduction reform in rural China on different categories of household expenditures, including spending on individual children. Using data that preand post-dated the reform, I exploit cohort comparisons, the variation in the extent of educational fee reductions across different villages, and variation in the transfers received by children enrolled in different grades within the same family to identify the impacts of the reform. I find that educational fee reductions were matched by increased voluntary educational spending on the same children receiving fee reductions, providing strong evidence of an intra-household flypaper effect. ∗Shi: [email protected], 238 Lorch Hall, 611 Tappan Street, Ann Arbor, MI 48109-1220. I thank Albert Park, David Lam, Dean Yang, and Brian Jacob for their helpful guidance and comments. I also thank Raj Arunachalam, Rebecca Thornton, and all participants in summer seminar and development seminar in the Department of Economics in the University of Michigan for their helpful comments. All remaining errors are mine. 1