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Returns to Schooling in China Under Planning and Reform

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  • Belton M. Fleisher

    ()

  • Xiaojun Wang

    ()

Abstract

We estimate returns to schooling using a retrospective work history survey covering more than 4,000 workers over the period 1950 to 1994, with particular emphasis to the returns to schooling for workers who attended institutes of higher education and who graduated from college. We find evidence that schooling returns declined throughout the period leading up to the Cultural Revolution (CR), with returns for workers who did not attend college becoming negligible. Returns to those with some college education remained positive, but low compared to other countries. Consistent with other studies, we find that returns to schooling did not recover from their CR low until the 1990s. Increases in the return to schooling during the transition following the CR were not associated directly with workers changing jobs or with taking “new-economy” jobs but appear to have occurred for most workers across all ownership categories. Workers most likely to leave jobs in the traditional ownership sector for jobs in the private or jointventure categories were those who entered the labor force prior to 1967. We do not find evidence supporting other studies’ finding that schooling returns for college graduates increased more than for workers with lower levels of schooling attainment.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2004-704.

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Length: 37 pages
Date of creation: 01 Jun 2004
Date of revision:
Handle: RePEc:wdi:papers:2004-704

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Keywords: returns to schooling; skills; China;

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References

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  1. Münich, Daniel & Svejnar, Jan & Terrell, Katherine, 1999. "Returns to Human Capital Under the Communist Wage Grid and During the Transition to a Market Economy," CEPR Discussion Papers 2332, C.E.P.R. Discussion Papers.
  2. Fleisher, Belton M. & Chen, Jian, 1997. "The Coast-Noncoast Income Gap, Productivity, and Regional Economic Policy in China," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 220-236, October.
  3. Heckman, James J. & Li, Xuesong, 2003. "Selection Bias, Comparative Advantage and Heterogeneous Returns to Education: Evidence from China in 2000," IZA Discussion Papers 829, Institute for the Study of Labor (IZA).
  4. Fleisher, Belton M. & Wang, Xiaojun, 2001. "Efficiency Wages and Work Incentives in Urban and Rural China," Journal of Comparative Economics, Elsevier, vol. 29(4), pages 645-662, December.
  5. Fleisher, Belton M. & Peter, Klara Sabirianova & Wang, Xiaojun, 2004. "Returns to Skills and the Speed of Reforms: Evidence from Central and Eastern Europe, China, and Russia," IZA Discussion Papers 1182, Institute for the Study of Labor (IZA).
  6. Orazem, Peter F & Vodopivec, Milan, 1995. "Winners and Losers in Transition: Returns to Education, Experience, and Gender in Slovenia," World Bank Economic Review, World Bank Group, vol. 9(2), pages 201-30, May.
  7. Knight, J. & Lina, S., 1990. "The Determinants Of Urban Income Inequality In China," Economics Series Working Papers 9991, University of Oxford, Department of Economics.
  8. Meng, Xin & Gregory, R G, 2002. "The Impact of Interrupted Education on Subsequent Educational Attainment: A Cost of the Chinese Cultural Revolution," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 935-59, July.
  9. Liu, Zhiqiang, 1998. "Earnings, Education, and Economic Reforms in Urban China," Economic Development and Cultural Change, University of Chicago Press, vol. 46(4), pages 697-725, July.
  10. Fleisher, Belton M & Dong, Keyong & Liu, Yunhua, 1996. "Education, Enterprise Organization, and Productivity in the Chinese Paper Industry," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 571-87, April.
  11. Meng, Xin & Kidd, Michael P., 1997. "Labor Market Reform and the Changing Structure of Wage Determination in China's State Sector during the 1980s," Journal of Comparative Economics, Elsevier, vol. 25(3), pages 403-421, December.
  12. Li, Haizheng, 2003. "Economic transition and returns to education in China," Economics of Education Review, Elsevier, vol. 22(3), pages 317-328, June.
  13. Meng,Xin, 2000. "Labour Market Reform in China," Cambridge Books, Cambridge University Press, number 9780521771269.
  14. Fleisher, Belton M. & Wang, Xiaojun, 2004. "Skill differentials, return to schooling, and market segmentation in a transition economy: the case of Mainland China," Journal of Development Economics, Elsevier, vol. 73(1), pages 315-328, February.
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Cited by:
  1. Vinod Mishra & Russell Smyth, 2012. "Returns to Schooling in Urban China: New Evidence Using Heteroskedasticity Restrictions to Obtain Identification Without Exclusion Restrictions," Monash Economics Working Papers 33-12, Monash University, Department of Economics.
  2. Xu Tian & Xiaohua Yu, 2012. "The Enigmas of TFP in China: A Meta-Analysis," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 113, Courant Research Centre PEG.
  3. Daniela Andren & John S. Earle & Dana Sapatoru, . "The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000," Upjohn Working Papers and Journal Articles jse20051, W.E. Upjohn Institute for Employment Research.
  4. Belton M Fleisher & Haizheng Li & Shi Li & Xiaojun Wang, 2005. "Sorting, Selection, and Transformation of Return to College Education in China," Working Papers 200507, University of Hawaii at Manoa, Department of Economics.
  5. Zhong, Hai, 2011. "Returns to higher education in China: What is the role of college quality?," China Economic Review, Elsevier, vol. 22(2), pages 260-275, June.
  6. Lili Kang & Fei Peng, 2012. "A selection analysis of returns to education in China," Post-Communist Economies, Taylor and Francis Journals, vol. 24(4), pages 535-554, March.
  7. Fleisher, Belton M. & Peter, Klara Sabirianova & Wang, Xiaojun, 2004. "Returns to Skills and the Speed of Reforms: Evidence from Central and Eastern Europe, China, and Russia," IZA Discussion Papers 1182, Institute for the Study of Labor (IZA).
  8. Liu, Zhiqiang, 2008. "Human capital externalities and rural-urban migration: Evidence from rural China," China Economic Review, Elsevier, vol. 19(3), pages 521-535, September.
  9. Ismail, Ramlee, 2007. "The Impact of Schooling Reform on Returns to Education in Malaysia," MPRA Paper 15021, University Library of Munich, Germany, revised 29 Jan 2008.
  10. CHEN, Guifu & HAMORI, Shigeyuki, 2009. "Economic returns to schooling in urban China: OLS and the instrumental variables approach," China Economic Review, Elsevier, vol. 20(2), pages 143-152, June.
  11. Kang, Lili & Peng, Fei, 2012. "Siblings, public facilities and education returns in China," MPRA Paper 38922, University Library of Munich, Germany.
  12. Wang, Xiaojun & Fleisher, Belton M. & Li, Haizheng & Li, Shi, 2007. "Access to Higher Education and Inequality: The Chinese Experiment," IZA Discussion Papers 2823, Institute for the Study of Labor (IZA).
  13. Su, Biwei & Heshmati, Almas, 2011. "Development and Sources of Labor Productivity in Chinese Provinces," IZA Discussion Papers 6263, Institute for the Study of Labor (IZA).
  14. Fleisher, Belton M. & Li, Haizheng & Li, Shi & Wang, Xiaojun, 2004. "Sorting, Selection, and Transformation of the Return to College Education in China," IZA Discussion Papers 1446, Institute for the Study of Labor (IZA).
  15. John Knight & Terry Sicular & Ximing Yue, 2011. "Educational Inequality in China: The Intergenerational Dimension," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 201113, University of Western Ontario, CIBC Centre for Human Capital and Productivity.

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