Preschool Vouchers

"We cannot afford to postpone investing in children until they become adults, nor can we wait until they reach school age—a time when it may be too late to intervene. Learning is a dynamic process and is most effective when it begins at a young age and continues through to adulthood."

-James Heckman, Nobel laureate in economics.



While almost all urban children attend preschool, preschool attendance rates in rural areas are still at around 50%, and in poorer regions have been reported to be as low as 20%. In a competitive school system like the one in China, children who fall behind early--or even before they go to school--will almost certainly stay behind. Such a huge gap in preschool attendance between urban and rural populations will likely lead to heightened social and economic inequalities in the future.

China's central government has recognized this problem, and in 2010 issued a policy directive to all regional and local bureaus of education urging them to increase public spending on preschool education. However, the directive failed to prescribe a definitive set of policy recommendations, leaving officials at the regional and local levels without a clear plan on how best to promote preschool education.

In fact, preschool education in China has almost always been privately funded and operated. Parents have to pay the full cost of tuition and fees in order to send their children to preschool. For parents with low incomes, preschool often presents a significant financial burden, or is too expensive to afford altogether. Thus, providing poor families with financial incentives to attend preschool, such as vouchers that cover preschool tuition or conditional cash transfers (CCTs) that pay for other school fees, may increase preschool attendance.


Our goal in this project is to evaluate whether a one-year voucher/CCT intervention is an effective way to increase preschool attendance and school readiness of young children in a poor part of rural China. 

We will pursue three specific objectives:

1) Document the nature of China’s preschool in poor rural areas, including number of students and quality of teachers, facilities, and healthcare
2) Measure the school readiness of rural children
3) Test the impact of vouchers and CCTs on preschool attendance and school readiness


We implemented the voucher/CCT intervention as part of a randomized controlled trial (RCT) in Lushan county in Henan Province. The RCT included three stages. In the first stage (july 2008), we conducted a baseline survey to collect information (including measuring school readiness) on a random sample of 141 four-year-old children, none of whom were then attending preschool. In the second stage (the school year from September 2008 to June 2009), we randomly assigned half of the sample children to an intervention group to receive the voucher/CCT, and kept the other half of the sample children as a control group. We also collected information on the children's attendance during the school year. In the third stage (when the children were just entering grade 1 in September 2010), we conducted an endline test to assess the school readiness of all sample children once again.

Each of the 70 children in the intervention group received a voucher waiving preschool tuition up to 300 yuan per semester (tuition in rural areas typically ranges between 150 and 300 yuan per semester) and a cash transfer conditional on attendance (families would receive 200 yuan per semester if attendance reached 80%). Therefore, if a child in the voucher/CCT group attended preschool regularly throughout the one-year intervention period, the household of the child would get a package of benefits close to 1000 yuan (300 + 300 + 200 + 200) in total value (or approximately 160 dollars when using the nominal exchange rate). The value of the voucher/CCT was almost half of the annual rural per capita income in the study county. The intervention therefore served as a large financial incentive for encouraging preschool attendance.

Map of Lushan County in Henan Province in China, the location of this study


In our baseline survey, we found that fully two thirds of children in Lushan county have skills and abilities that are insufficient for them to succeed in elementary school. We found strong evidence in our RCT that providing young children's families with a voucher and CCT can raise preschool attendance effectively. In the intervention group, nearly 75% of children attended preschool, whereas in the control group only 55% did.

However, the positive impacts of the voucher and CCT intervention on preschool attendance did not translate into improved school readiness. We believe that this is due to the poor quality of preschools in rural China. In rural China, the student-to-teacher ratio in preschools was very high at 29:1. In urban areas, this rate was only 10:1. Only 12% of preschool teachers in rural areas had formal certificates or training in fields related to preschool education. Preschool principals were often unable to hire more teachers with proper qualifications due to a lack of financial resources. Additionally, many preschools in rural China did not meet the minimum standards for facilities and equipment. Given the poor environment and teaching quality in many preschools in rural China, it may not be surprising that preschool education did not lead to improvements to children's school readiness.

We offer two policy recommendations on the investment into preschool education in poor areas of rural China. The government should invest heavily into the teaching, environment, and facilities of preschools to make preschool education truly value-adding. The government should also provide more financial resources to help young children in poor rural areas attend preschool. We estimate that there are roughly 6 million children aged 4 and 5 in China's 592 nationally-designated poor counties. If 75% of these children used a voucher and CCT, the annual cost of this preschool program would be around 4.5 billion yuan. The per capita cost of this program is comparable to China's national Nutritious School Lunch Program. If the quality of preschool in poor areas could be improved in ways that can actually benefit young children, such a voucher and CCT program for preschool attendance would be affordable and worth funding.


Thank you to Plan International for support in implementing this project.

Thank you to Nokia for providing funding.