Parental Education and Wages: Evidence from China

This paper investigates the relationship between parents¡¯ education and children¡¯s wage using two nationally representative data sets in China. Controlling for other things, both father¡¯s and mother¡¯s education are positively correlated with children¡¯s wage. Nevertheless, returns to father¡¯s education are lower in more market-oriented segments of the economy, including coastal regions, the non-state sector, and the later period of the reform era (post-1992), while the opposite is true for mother¡¯s education. We argue that this new empirical evidence is consistent with the story that father¡¯s education mainly indicates family connections useful for locating a better-paying first job, while mother¡¯s education primarily captures unmeasured ability.