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Employer Learning and the Dynamics of Returns to Universities: Evidence from Chinese Elite Education during University Expansion

Author

Listed:
  • Sylvie Démurger
  • Eric A. Hanushek
  • Lei Zhang

Abstract

This paper estimates the return to an elite-university education over a college graduate’s career in contemporary China. After allowing for university selectivity by including individual admission scores, we find a substantial premium for graduating from an elite Chinese university at the job entry that declines quickly in early career before starting to return. Results are entirely driven by cohorts entering college after the 1999 higher-education expansion. The pattern is more pronounced in coastal provinces and in economically more developed regions. The results are consistent with predictions of asymmetric employer-learning models.

Suggested Citation

  • Sylvie Démurger & Eric A. Hanushek & Lei Zhang, 2024. "Employer Learning and the Dynamics of Returns to Universities: Evidence from Chinese Elite Education during University Expansion," Economic Development and Cultural Change, University of Chicago Press, vol. 73(1), pages 339-379.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/727519
    DOI: 10.1086/727519
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    Cited by:

    1. Borsi, Mihály Tamás & Valerio Mendoza, Octasiano Miguel & Comim, Flavio, 2022. "Measuring the provincial supply of higher education institutions in China," China Economic Review, Elsevier, vol. 71(C).
    2. Wang, Jiyuan & Alessie, Rob & Angelini, Viola, 2025. "Why do parents underinvest in their children’s education? Evidence from China," Economics of Education Review, Elsevier, vol. 107(C).
    3. Hao, Zedong & Wang, Yun, 2022. "Education signaling, effort investments, and the market's expectations: Theory and experiment on China's higher education expansion," China Economic Review, Elsevier, vol. 75(C).
    4. Du, Xinming, 2023. "Competing with clean air: Pollution disclosure and college desirability," Ecological Economics, Elsevier, vol. 204(PA).
    5. Hanushek, Eric A. & Wang, Yuan & Zhang, Lei, 2025. "Understanding trends in Chinese skill premiums, 2007–2018," Journal of Comparative Economics, Elsevier, vol. 53(2), pages 584-608.
    6. Zhou, Jing & Chen, Huashuai, 2023. "Will reducing the burden of extracurricular tutoring raise fertility willingness in China? Five policy suggestions," Journal of Policy Modeling, Elsevier, vol. 45(6), pages 1132-1147.
    7. Guo, Juncong & Qu, Xi, 2022. "Competition in household human capital investments: Strength, motivations and consequences," Journal of Development Economics, Elsevier, vol. 158(C).

    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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