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Reconciling the Returns to Education in Off-Farm Wage Employment in Rural China

  • Alan de Brauw
  • Scott Rozelle

Previous studies have found that the returns to education in rural China are far lower than estimates for other developing economies. In this paper, we seek to determine why previous estimates are so low and provide estimates of what we believe are more accurate measures of the returns. Whereas estimates for the early 1990s average 2.3 percent, we find an average return of 6.4 percent. Furthermore, we find even higher returns among younger people, migrants, and for post-primary education. The paper demonstrates that, although part of the difference between our estimate and previous estimates can be attributed to increasing returns during the 1990s, a larger part of the difference is due to the nature of the data and the methodological approaches used by other authors. Copyright � 2007 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 12 (2008)
Issue (Month): 1 (02)
Pages: 57-71

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Handle: RePEc:bla:rdevec:v:12:y:2008:i:1:p:57-71
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  1. Orley Ashenfelter & David J. Zimmerman, 1993. "Estimates of the Returns to Schooling From Sibling Data: Fathers, Sons and Brothers," NBER Working Papers 4491, National Bureau of Economic Research, Inc.
  2. Yang, Dennis, 1995. "Education and Off-Farm Work," Working Papers 95-09, Duke University, Department of Economics.
  3. Yaohui Zhao, 1997. "Labor Migration and Returns to Rural Education in China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1278-1287.
  4. Yang, Dennis Tao & An, Mark Yuying, 2002. "Human capital, entrepreneurship, and farm household earnings," Journal of Development Economics, Elsevier, vol. 68(1), pages 65-88, June.
  5. meng, xin, 1994. "An examination of wage determination in China’s rural industrial sector," MPRA Paper 1344, University Library of Munich, Germany.
  6. Brown, Philip H. & Park, Albert, 2002. "Education and poverty in rural China," Economics of Education Review, Elsevier, vol. 21(6), pages 523-541, December.
  7. Giles, John & Park, Albert & Wang, Meiyan, 2008. "The great proletarian cultural revolution, disruptions to education, and returns to schooling in urban China," Policy Research Working Paper Series 4729, The World Bank.
  8. 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.
  9. Jian Zhang & Linxiu Zhang & Scott Rozelle & Steve Boucher, 2006. "Self-Employment With Chinese Characteristics: The Forgotten Engine Of Rural China'S Growth," Contemporary Economic Policy, Western Economic Association International, vol. 24(3), pages 446-458, 07.
  10. Meng, Xin & Zhang, Junsen, 2001. "The Two-Tier Labor Market in Urban China: Occupational Segregation and Wage Differentials between Urban Residents and Rural Migrants in Shanghai," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 485-504, September.
  11. Zhang, Junsen & Zhao, Yaohui & Park, Albert & Song, Xiaoqing, 2005. "Economic returns to schooling in urban China, 1988 to 2001," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 730-752, December.
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