Place-based policies and gendered human capital formation: Evidence and mechanisms

Abstract

Place-based policies have been found to promote local human capital investment. However, their benefits are unevenly distributed between genders. Based on a cohort difference-in-difference-in-differences design, we identify the gendered effects of place-based policies on local human capital formation. Exposure to Special Economic Zones (SEZs) upgradings significantly reduces the gender gap in higher education access. Mechanism analysis shows that improved female labor market outcomes led by SEZ spillovers to the local non-knowledge-intensive service (non-KIBS) sector, instead of labor market changes within SEZs, drive this effect. Increased family income accounts for a small part of the effect. We find no evidence for channels through shifts in gender norms. The effects are more pronounced in rural families, technology-oriented SEZs, and less developed regions. Our findings highlight the importance of developing the female-intensive service sector and shifting social norms in place-based policy designs.