Private education development under demographic change: evidence from Zhejiang Province, China (2008-2023)

This study examines how demographic changes affect private education development using panel data from Zhejiang Province, China (2008-2023). We document striking heterogeneity across educational stages: preschool education's private share declined from 63.6% to 29.5% (-34.1 percentage points), primary education from 9.3% to 6.0%, while senior secondary education increased from 21.5% to 25.6%. We find that a one percentage point decline in school-age population is associated with a 1.234 percentage point reduction in private share for preschool but negligible effects in primary education. The 2018 preschool reform coincided with an additional 12.5 percentage point decline relative to primary education. Heterogeneity analysis reveals that high-quality schools show 66.5% stronger resilience to population pressure, while market concentration reduces vulnerability by approximately 30%. These patterns suggest that education markets adapt through quality differentiation and market restructuring rather than uniform contraction. However, findings from Zhejiangone of China's most developed provincesmay not generalize to less developed regions. The results highlight the importance of stage-specific policies accounting for varying market structures and demographic sensitivities.