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Does Education Still Pay Off in Rural China: Revisit the Impact of Education on Off‐farm Employment and Wages

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  • Haiqing Zhang
  • Linxiu Zhang
  • Renfu Luo
  • Qiang Li

Abstract

The present study considers how education affects off‐farm job participation and wages. We use a nationally representative dataset from a survey conducted in 5 provinces, 101 villages and 808 households by the authors in early 2005. The empirical results show that educational attainment, skill training and years of experience of rural residents have positive, statistically significant effects on off‐farm employment. The average return to a year of education is 7 percent, which is higher than those observed in previous studies. We also find the return to an additional year of schooling to be higher for post‐junior high schooling than for junior high and below schooling: 11.8 versus 3.2 percent. We conclude that not only does education still pays off in rural China, but also the rate of return to education is increasing over time.

Suggested Citation

  • Haiqing Zhang & Linxiu Zhang & Renfu Luo & Qiang Li, 2008. "Does Education Still Pay Off in Rural China: Revisit the Impact of Education on Off‐farm Employment and Wages," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(2), pages 50-65, March.
  • Handle: RePEc:bla:chinae:v:16:y:2008:i:2:p:50-65
    DOI: 10.1111/j.1749-124X.2008.00106.x
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    References listed on IDEAS

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    1. William L. Parish & Xiaoye Zhe & Fang Li, "undated". "Nonfarm Work and Marketization of the Chinese Countryside," University of Chicago - Population Research Center 95-6, Chicago - Population Research Center.
    2. Samuel P.S. Ho & Xiao-Yuan Dong & Paul Bowles & Fiona MacPhail, 2002. "Privatization and enterprise wage structures during transition: Evidence from rural industry in china," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(3), pages 659-688, November.
    3. Zhang, Linxiu & Rozelle, Scott & Huang, Jikun, 2001. "Off-Farm Jobs and On-Farm Work in Periods of Boom and Bust in Rural China," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 505-526, September.
    4. Rozelle Scott, 1994. "Rural Industrialization and Increasing Inequality: Emerging Patterns in China's Reforming Economy," Journal of Comparative Economics, Elsevier, vol. 19(3), pages 362-391, December.
    5. Heckman, James J., 2005. "China's human capital investment," China Economic Review, Elsevier, vol. 16(1), pages 50-70.
    6. Zhao, Yaohui, 1999. "Labor Migration and Earnings Differences: The Case of Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 767-782, July.
    7. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    8. Qiang Li & Alan de Brauw & Scott Rozelle & Linxiu Zhang, 2005. "Labor Market Emergence and Returns to Education in Rural China ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(3), pages 418-424.
    9. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
    10. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, July.
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    Cited by:

    1. Ge, Suqin & Yang, Dennis Tao, 2011. "Labor market developments in China: A neoclassical view," China Economic Review, Elsevier, vol. 22(4), pages 611-625.
    2. Fangbin Qiao & Scott Rozelle & Linxiu Zhang & Yi Yao & Jian Zhang, 2015. "Impact of Childcare and Eldercare on Off-farm Activities in Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(2), pages 100-120, March.
    3. Yunli Bai & Weidong Wang & Linxiu Zhang, 2018. "How Long Do Return Migrants Stay in Their Home Counties? Trends and Causes," Sustainability, MDPI, Open Access Journal, vol. 10(11), pages 1-21, November.
    4. Sefa Awaworyi & Vinod Mishra, 2014. "Returns to Education in China: A Meta-analysis," Monash Economics Working Papers 41-14, Monash University, Department of Economics.

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