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Labor Market Returns to Education and English Language Skills in the People's Republic of China: An Update

Author

Listed:
  • M Niaz Asadullah

    (Professor, Faculty of Economics and Administration, University of Malaya. Author email: m.niaz@um.edu.my)

  • Saizi Xiao

    (Doctoral Researcher, Faculty of Economics and Administration, University of Malaya. Author email: xszbrave@aliyun.com)

Abstract

We reexamine the economic returns to education in the People's Republic of China (PRC) using data from the Chinese General Social Survey 2010. We find that the conventional ordinary least squares estimate of wage returns to schooling is 7.8%, while the instrumental variable estimate is 20.9%. The gains from schooling rise sharply with higher levels of education. The estimated returns are 12.2% in urban provinces and 10.7% in coastal provinces, higher than in rural and inland areas. In addition, the wage premium for workers with good English skills (speaking and listening) is 30%. These results are robust to controls for height, body mass index, and English language skills, and to corrections for sample selection bias. Our findings, together with a critical review of existing studies, confirm the growing significance of human capital as a determinant of labor market performance in postreform PRC.

Suggested Citation

  • M Niaz Asadullah & Saizi Xiao, 2019. "Labor Market Returns to Education and English Language Skills in the People's Republic of China: An Update," Asian Development Review, MIT Press, vol. 36(1), pages 80-111, March.
    • Handle: RePEc:tpr:adbadr:v:36:y:2019:i:1:p:80-111
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    Cited by:

    1. Prashant Loyalka & Dinsha Mistree & Robert Fairlie & Saurabh Khanna, 2025. "Job Training, English Language Skills, and Employability: Evidence from an Experiment in Urban India," Economic Development and Cultural Change, University of Chicago Press, vol. 73(4), pages 2131-2156.
    2. Asadullah, M. Niaz & Xiao, Saizi, 2020. "The changing pattern of wage returns to education in post-reform China," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 137-148.
    3. Asadullah, M. Niaz & Trannoy, Alain & Tubeuf, Sandy & Yalonetzky, Gaston, 2021. "Measuring educational inequality of opportunity: pupil’s effort matters," World Development, Elsevier, vol. 138(C).
    4. Kłobuszewska Małgorzata, 2022. "Demand for Additional Foreign Language Activities in Poland," Central European Economic Journal, Sciendo, vol. 9(56), pages 254-268, January.
    5. Jiantao Zhou & Eddie Chi‐Man Hui, 2022. "The hukou system and selective internal migration in China," Papers in Regional Science, Wiley Blackwell, vol. 101(2), pages 461-482, April.
    6. Siddique Abu Bakkar, 2020. "Identity-based Earning Discrimination among Chinese People," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-42, January.
    7. Vandenberg, Paul & Laranjo, Jade, 2021. "Vocational training and labor market outcomes in the Philippines," International Journal of Educational Development, Elsevier, vol. 87(C).
    8. Kentaro Hatsumi, 2023. "Second‐language acquisition behavior and hegemonic language," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(1), pages 3-20, March.

    More about this item

    Keywords

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    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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