SMU SOE Seminar Series (March 19, 2025): The Long-Run Impact of Early Industrial Development on Human Capital: Evidence from China's 156 Project

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ABSTRACT

This paper studies the long-term effects of large-scale industrial plant openings on local human capital development. In the 1950s, a short-lived alliance between the Soviet Union and China resulted in the establishment of the 156 Projects, a series of large industrial clusters constructed across China. For each project, several candidate sites meeting specific criteria were shortlisted, with one ultimately chosen as the host. Using county-level data compiled from local gazetteers, plant-level surveys, and population census, we find that the establishment of the 156 Projects led to significant and lasting increases in children's years of schooling in host counties compared to runner-up counties. Socioeconomically disadvantaged groups, such as girls and children in rural and less educated areas, experienced greater educational gains from these projects. This study provides new insights into the enduring effects of early industrialization in low-education, agrarian economies.

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