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Returns to schooling in China under planning and reform

  • Fleisher, Belton M.
  • Wang, Xiaojun

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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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 33 (2005)
Issue (Month): 2 (June)
Pages: 265-277

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Handle: RePEc:eee:jcecon:v:33:y:2005:i:2:p:265-277
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  1. 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.
  2. Heckman, James & Li, Xuesong, 2003. "Selection bias, comparative advantage and heterogeneous returns to education: Evidence from China in 2000," Working Paper Series 2003:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  3. Meng,Xin, 2000. "Labour Market Reform in China," Cambridge Books, Cambridge University Press, number 9780521771269, October.
  4. Münich, Daniel & Svejnar, Jan & Terrell, Katherine, 2000. "Returns to Human Capital under the Communist Wage Grid and During the Transition to a Market Economy," IZA Discussion Papers 122, Institute for the Study of Labor (IZA).
  5. 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.
  6. 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.
  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. 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.
  9. Belton M. Fleisher & Klara Sabirianova Peter & Xiaojun Wang, 2004. "Returns to Skills and the Speed of Reforms: Evidence from Central and Eastern Europe, China, and Russia," William Davidson Institute Working Papers Series 2004-703, William Davidson Institute at the University of Michigan.
  10. Orazem, Peter F. & Vodopivec, Milan, 1994. "Winners and losers in transition : returns to education, experience, and gender in Slovenia," Policy Research Working Paper Series 1342, The World Bank.
  11. Li, Haizheng, 2003. "Economic transition and returns to education in China," Economics of Education Review, Elsevier, vol. 22(3), pages 317-328, June.
  12. 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.
  13. 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.
  14. Jones, Derek C. & Ilayperuma Simon, Kosali, 2005. "Wage determination under plan and early transition: Bulgarian evidence using matched employer-employee data," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 227-243, June.
  15. 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.
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