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Returns to Higher Education in China: Evidence from the 1999 Higher Education Expansion Using Fuzzy Regression Discontinuity

Author

Listed:
  • Dai, Fengyan

    () (Nanjing University of Finance and Economics)

  • Cai, Fang

    () (Chinese Academy of Social Sciences)

  • Zhu, Yu

    () (University of Dundee)

Abstract

China experienced a 47% expansion in higher education enrolment between 1998 and 1999, and a six-fold expansion in the decade to 2008. In this paper, we explore a fuzzy discontinuity in the months of births induced by the expansion to study the returns to higher education in China. We find that the mean years of education increased by roughly one full year around the cut-off point of the 1999 expansion as defined by months of births. Importantly, each additional year of university education induced by the 1999 higher education expansion increases monthly wage income by 21%, whereas the corresponding OLS estimate is only 8%. Our findings are insensitive to alternative window widths, functional forms, or the exclusion of the self-employed. Moreover, the returns to degrees also appear to vary by gender, with lowers returns to women except when they are the only child in the family.

Suggested Citation

  • Dai, Fengyan & Cai, Fang & Zhu, Yu, 2018. "Returns to Higher Education in China: Evidence from the 1999 Higher Education Expansion Using Fuzzy Regression Discontinuity," IZA Discussion Papers 11735, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11735
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    References listed on IDEAS

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    1. Ian Walker & Yu Zhu, 2008. "The College Wage Premium and the Expansion of Higher Education in the UK," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 695-709, December.
    2. Richard Blundell & David A. Green & Wenchao (Michelle) Jin, 2016. "The UK wage premium puzzle: how did a large increase in university graduates leave the education premium unchanged?," IFS Working Papers W16/01, Institute for Fiscal Studies.
    3. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
    4. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
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    6. Sebastian Calonico & Matias D. Cattaneo & Rocio Titiunik, 2014. "Robust Nonparametric Confidence Intervals for Regression‐Discontinuity Designs," Econometrica, Econometric Society, vol. 82, pages 2295-2326, November.
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    8. Blundell, Richard, et al, 2000. "The Returns to Higher Education in Britain: Evidence from a British Cohort," Economic Journal, Royal Economic Society, vol. 110(461), pages 82-99, February.
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    10. Junxia Zeng & Xiaopeng Pang & Linxiu Zhang & Alexis Medina & Scott Rozelle, 2014. "Gender Inequality In Education In China: A Meta-Regression Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 474-491, April.
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    13. Hai Fang & Karen N. Eggleston & John A. Rizzo & Scott Rozelle & Richard J. Zeckhauser, 2012. "The Returns to Education in China: Evidence from the 1986 Compulsory Education Law," NBER Working Papers 18189, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    returns to higher education; higher education expansion; regression discontinuity design; China;

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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