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Returns to higher education in China: What is the role of college quality?

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  • Zhong, Hai

Abstract

When there is substantial variation in the quality of colleges and universities, estimating returns to higher education based on quantity of education alone can be misleading. This paper examines the relationship between returns to higher education and college quality in China. We find that returns to higher education vary significantly depending on school quality. In addition, we find that the relationship between earnings and school quality is stronger for cohorts of workers that have entered the workforce more recently. This finding may result from the fact that as the transition toward a market system progresses in China, the wage system becomes increasingly responsive to key components of human capital. We also find that the earning gap between graduates from lower-quality colleges and those from vocational/technical schools decreases over time. Our results may help to inform individual decision-making on investment in education, effective expansion of the higher education system, and efficient resource allocation across different levels of the education system.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:chieco:v:22:y:2011:i:2:p:260-275
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    Citations

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    Cited by:

    1. Asian Development Bank Institute, 2017. "Human Capital Development in the People’s Republic of China and India: Achievements, Prospects, and Policy Challenges," Working Papers id:11819, eSocialSciences.
    2. Xie, Shiqing & Mo, Taiping, 2014. "The impact of education on health in China," China Economic Review, Elsevier, vol. 29(C), pages 1-18.
    3. Boccanfuso, Dorothée & Larouche, Alexandre & Trandafir, Mircea, 2015. "Quality of Higher Education and the Labor Market in Developing Countries: Evidence from an Education Reform in Senegal," World Development, Elsevier, vol. 74(C), pages 412-424.
    4. Shang, Qingyan & Poon, Jessie P.H. & Yue, Qingtang, 2012. "The role of regional knowledge spillovers on China's innovation," China Economic Review, Elsevier, vol. 23(4), pages 1164-1175.
    5. Shahid Yusuf, 2012. "From Technological Catch-up to Innovation : The Future of China’s GDP Growth," World Bank Other Operational Studies 12781, The World Bank.
    6. Zhang, Huafeng, 2014. "The poverty trap of education: Education–poverty connections in Western China," International Journal of Educational Development, Elsevier, vol. 38(C), pages 47-58.
    7. Messinis, George, 2013. "Returns to education and urban-migrant wage differentials in China: IV quantile treatment effects," China Economic Review, Elsevier, vol. 26(C), pages 39-55.
    8. ZHONG, Hai, 2015. "An over time analysis on the mechanisms behind the education–health gradients in China," China Economic Review, Elsevier, vol. 34(C), pages 135-149.
    9. LIU Yang, 2016. "Employment and Starting Wages of New Graduates in China: Using the latest available survey data," Discussion papers 16021, Research Institute of Economy, Trade and Industry (RIETI).
    10. Wang, Le, 2012. "Economic transition and college premium in urban China," China Economic Review, Elsevier, vol. 23(2), pages 238-252.
    11. Mishra, Vinod & Smyth, Russell, 2013. "Economic returns to schooling for China's Korean minority," Journal of Asian Economics, Elsevier, vol. 24(C), pages 89-102.
    12. Wenshu Gao & Russell Smyth, 2012. "Returns to Schooling in Urban China, 2001-2010: Evidence from Three Waves of the China Urban Labor Survey," Monash Economics Working Papers 50-12, Monash University, Department of Economics.
    13. 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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