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Access to Higher Education and Inequality: The Chinese Experiment

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Author Info
Belton Fleisher () (Department of Economics, Ohio State University)
Xiaojun Wang () (Department of Economics, University of Hawaii at Manoa)
Haizheng Li () (School of Economics, Georgia Institute of Technology)
Shi Li () (School of Economics and Business, Beijing Normal University)

Additional information is available for the following registered author(s):

Abstract

We apply a semi-parametric latent variable model to estimate selection and sorting effects on the evolution of private returns to schooling for college graduates during China’s reform between 1988 and 2002. We find that there were substantial sorting gains under the traditional system, but they have decreased drastically and are negligible in the most recent data. We take this as evidence of growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies has declined. The main policy implication of our results is that labor and education reform without concomitant capital market reform and government support for the financially disadvantaged exacerbates increases in inequality inherent in elimination of the traditional "wage-grid."

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Publisher Info
Paper provided by Ohio State University, Department of Economics in its series Working Papers with number 09-02.

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Length: 42 pages
Date of creation: Feb 2009
Date of revision:
Handle: RePEc:osu:osuewp:09-02

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Postal: 410 Arps Hall 1945 North High Street Columbus, Ohio 43210-1172

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Related research
Keywords: Return to schooling; selection bias; sorting gains; heterogeneity; financial constraints; comparative advantage; China;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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    Other versions:
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