We calculate DEA Malmquist indices of productivity growth for the twenty-nine continental Chinese provinces for the period f 1993 to 2001. Using a panel econometric model of productivity growth, we investigate the different effects that primary education, secondary education and university education exert on total factor productivity growth. We show that university education has a favourable effect both on efficiency growth and technical progress, while primary education and secondary education have an unfavourable one on efficiency growth. Moreover, the favorable effect of university education on efficiency change is through the reallocation of university-educated workers into more efficient non-state sector.