CCTs and Junior High Dropout

Students of poor families often drop out of school to join the work force.

China has made great achievements in rural compulsory education over the past decades. In particular during the last five years, the national government has invested many resources to make grades 1 to 9 nearly free for all.


However, REAP has discovered through recent work with the Zigen Fund, a local NGO, that many children of poor families in Shilou County—and quite possibly in other very poor counties—are not finishing junior high (Jiang, 2008). It is a common occurrence that the poorest of the poor students drop out of junior high school, well before they have a chance for high school or vocational training. Instead of finishing school, they often begin working in manual labor to earn income for their families.

Why are students leaving school early? Among the many possible reasons is the simple fact that attending school is too expensive. Unable to pay for room, board, and a myriad of other costs of attending school, many families have their children enter the unskilled labor market to earn much needed cash. Financial aid is practically nonexistent for these families.

What are the consequences? While entering the unskilled labor market to earn marginal income allows these students to help their poor families in the short run, foregoing further education prevents them from earning much higher wages in the long run. By sacrificing education at such an early age in order to help their parents, these students will likely remain trapped in poverty as they grow older and become parents themselves.

This study aims to test the proposition that students in rural areas are willing and capable to attend middle school so long as that option is financially feasible. With this goal in mind, The Zigen Fund has organized a scholarship program that targets junior high students in Shilou County. In evaluating the outcome of the scholarship program, REAP hopes to highlight the needs of poor communities that are currently unmet within the compulsory education system in China. Specifically, the objective of the study will be to track the impact (during 7th, 8th and 9th grades) of financial aid on the effort and performance of students in the treatment and control groups.

The main outcome variables will be:

  • grades

  • standardized test scores

  • self-esteem

  • dropout rates

  • dropout rates of siblings

  • employment decisions of parents (do they stay at home or work as a migrant; etc.)

  • high school enrollment rates


Step 1: Identifying the poorest of the poor.

Shilou County is among the poorest counties in Shanxi Province and one of the poorest places in all of China. At the end of 2008, rural per capita net income in Shilou County was 1024 yuan (US$150), a mere quarter of the national level. 71,000 people in the county are living below China’s official poverty line, accounting for 65 percent of the total population. Meanwhile the average tuition and fees for high school in Shilou are around 4000 yuan per year. 

In June 2009, enumerators from the REAP team and our project partners at the Zigen Fund visited all rural primary schools in Shilou county. The purpose of this trip was to identify the absolute poorest students in the county. The enumerators interviewed two people in each school to collect information on the economic status of students that had finished primary school. One was the homeroom teacher and the other was a class teacher or school principal. Using data collected from these individuals, REAP was able to select the poorest students in each class.

Step 2: Conducting the Baseline Survey

In September 2009, four enumerators from the Center for Chinese Agricultural Policy and Northwest University in China were selected and trained in Xian City for three days. These enumerators visited the 10 junoir high schools in Shilou county and conducted the baseline survey for this experiment. The total number of seventh grade (chu yi) students participating in the experiment was 1507.

Step 3: Establishing treatment and control groups.

The 300 students that we designated as the poorest of the poor were randomly divided into two groups of 150 students. The methodology of randomization ensures that there is no significant difference in junior high entrance examination math scores or any other measurable factors between the treatment group and control group at the time of the baseline survey.

  • Treatment group: 150 poor students were randomly selected to compose the treatment group. These students were given financial aid equivalent to 1000 RMB for the 2009-10 academic year. This aid will be given again for each remaining junior high year, i.e. 2010-11 and 2011-12, so long as the child remains enrolled in school. The Zigen Fund is tasked with dispersing the financial aid over four payments per academic year.

  • Control Group 1: The 150 students in the control group were also selected from the poorest group of students. They will not participate in any aspect of the intervention other than the baseline and final testing. They will serve as a basis of comparison for those students that received financial aid.


Follow-up surveys and tests of each student in the intervention and control groups were administered at the conclusion of the academic year. These surveys collected data on student grades, standardized test scores, self-esteem, school attendance, and dropout rates. 


After sampling the poorest 300 junior high school students in Northwest China, we find that the annual dropout rate in the study county was 7.8% and even higher, 13.3%, among the children of poor households. We find that the CCT program reduced dropout by 60%. It was most successful with students with poor academic performance, and it was likely more effective among girls and younger students.


The importance of our findings is underlined by the importance of keeping students in school. If the social return to a junior high education is high, China’s future economic growth and stability depends on reducing dropout. Unfortunately, once students drop out from junior high school, it is very unlikely that they will return. Adult education is limited in China, has not received significant investment, and is presently deemed ineffective in most developing countries. As such, measures to reduce dropout should be tested and implemented as soon as possible.


IET Foundation

Works Cited

Jiang, Z.. 2008. Reducing the dropout rate in rural Junior high schools and the reform of compulsory education.