“Farewell to Confucianism: The Modernizing Effect of Dismantling China’s Imperial Examination System”, 2019 (; similar):
The civil examination was an institutional obstacle to the pursuit of modernization.
Regions assigned more quotas acquired more Western knowledge after abolition.
The examination system led to substantial misallocation of talent.
The skill levels of individuals in the modern sector increased following abolition.
This study uses 1899–91908116ya prefecture-level panel data to assess how the likelihood of passing the civil service examination affected modernization before and after the examination system’s abolition.
Because higher quotas were assigned to prefectures with an agricultural tax of over 150,000 piculs, we use a regression discontinuity design to generate an instrument that resolves potential endogeneity and ensures robust results.
We find that following abolition, prefectures with higher quotas of successful candidates tended to establish more modern firms and send more students for overseas study in Japan. A subsequent analysis using an individual dataset further shows that the skill level of these overseas students increased after abolition, especially in regions with higher per capita quotas.
This finding implies that the examination system led to substantial misallocation of talents.
[Keywords: Imperial civil examination, incentive, modern firms, overseas study]
…A major empirical challenge in doing so, however, is the abolition’s universality, which engendered no regional variations in policy implementation. Hence, to better understand the abolition’s modernizing effect, we use a simple conceptual framework that incorporates 2 choices open to Chinese elites: learn from the West and pursue modernization activities (ie. study modern science and technology) or invest in preparing for the civil examination (ie. study Confucian classics). In this model, elites with a greater chance of passing the examination are less likely to pursue (Western) modernization activities pre-abolition but more likely to do so post-abolition. Accordingly, the regions with a higher likelihood of passing the examination should be those with a larger increase in post-abolition modernization activities, allowing us to use a difference in differences (DID) method to identify the abolition’s causal impact.
…Evaluated at the sample mean, each one standard deviation increases in the logged quotas per capita (0.70) led to another 0.23 newly established modern firms and another 0.66 students traveling to Japan for overseas study per year. These empirical results are robust to controlling for geographic factors, population, level of urbanization, and Western penetration, as well as to the use of different model specifications. By estimating the yearly correlation between the logged quotas per capita and the density of modernization activities from 1899–91908116ya, we also show that the pre-abolition correlation remains stable until it suddenly increases following the abolition decision.