IDEAS home Printed from https://ideas.repec.org/p/mos/moswps/2012-50.html
   My bibliography  Save this paper

Returns to Schooling in Urban China, 2001-2010: Evidence from Three Waves of the China Urban Labor Survey

Author

Listed:
  • Wenshu Gao
  • Russell Smyth

Abstract

This study provides estimates of the returns to schooling in urban China for migrants and non-migrants using three waves of the China Urban Labor Survey (CULS), corresponding to 2001, 2005 and 2010. We find that the returns to schooling increased about 2-3 per cent between 2001 and 2010. The two-stage least squares (TSLS) estimates, using spouse’s education as an instrumental variable, are slightly higher than the ordinary least squares (OLS) estimates, although TSLS estimates using an internal instrument constructed from the heteroskedasticity in the data are similar to the OLS estimates. We find that returns to schooling are higher for non-migrants than migrants and higher for males than females over the decade.

Suggested Citation

  • Wenshu Gao & Russell Smyth, 2012. "Returns to Schooling in Urban China, 2001-2010: Evidence from Three Waves of the China Urban Labor Survey," Monash Economics Working Papers 50-12, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2012-50
    as

    Download full text from publisher

    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2012/5012returnsgaosmyth.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Margaret Maurer-Fazio & Ngan Dinh, 2004. "Differential rewards to, and contributions of, education in urban China's segmented labor markets," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 173-189, October.
    2. G. Reza Arabsheibani & Altay Mussurov, 2007. "Returns to schooling in Kazakhstan," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(2), pages 341-364, April.
    3. repec:taf:jnlbes:v:30:y:2012:i:1:p:67-80 is not listed on IDEAS
    4. Ge, Suqin & Yang, Dennis Tao, 2011. "Labor market developments in China: A neoclassical view," China Economic Review, Elsevier, vol. 22(4), pages 611-625.
    5. Ren, Weiwei & Miller, Paul W., 2012. "Changes over time in the return to education in urban China: Conventional and ORU estimates," China Economic Review, Elsevier, vol. 23(1), pages 154-169.
    6. Zhong, Hai, 2011. "Returns to higher education in China: What is the role of college quality?," China Economic Review, Elsevier, vol. 22(2), pages 260-275, June.
    7. Xiao-Yuan Dong & Lixin Colin Xu, 2008. "The impact of China's millennium labour restructuring program on firm performance and employee earnings," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(2), pages 223-245, April.
    8. Zhang, Junsen & Liu, Pak-Wai & Yung, Linda, 2007. "The Cultural Revolution and returns to schooling in China: Estimates based on twins," Journal of Development Economics, Elsevier, vol. 84(2), pages 631-639, November.
    9. Joseph J. Sabia, 2007. "The Effect of Body Weight on Adolescent Academic Performance," Southern Economic Journal, Southern Economic Association, vol. 73(4), pages 871-900, April.
    10. Magnani, Elisabetta & Zhu, Rong, 2012. "Gender wage differentials among rural–urban migrants in China," Regional Science and Urban Economics, Elsevier, vol. 42(5), pages 779-793.
    11. Giorgio Di Pietro & Lucas Pedace, 2008. "Changes in the returns to education in Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 11, pages 259-279, November.
    12. Wenshu Gao & Russell Smyth, 2010. "Health Human Capital, Height and Wages in China," Journal of Development Studies, Taylor & Francis Journals, vol. 46(3), pages 466-484.
    13. Jason Gagnon & Theodora Xenogiani & Chunbing Xing, 2009. "Are all Migrants Really Worse off in Urban Labour Markets?: New empirical evidence from China," OECD Development Centre Working Papers 278, OECD Publishing.
    14. Meng,Xin, 2009. "Labour Market Reform in China," Cambridge Books, Cambridge University Press, number 9780521121118, May.
    15. Belton M. Fleisher & Haizheng Li & Shi Li & Xiaojun Wang, 2000. "Sorting, Selection, and Transformation of the Return to College Education In China," William Davidson Institute Working Papers Series wp756, William Davidson Institute at the University of Michigan.
    16. Xin Meng & Kailing Shen & Sen Xue, 2010. "Economic Reform, Education Expansion, and Earnings Inequality for Urban Males in China, 1988-2007," CEPR Discussion Papers 639, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    17. Anil B. Deolalikar, 1993. "Gender Differences in the Returns to Schooling and in School Enrollment Rates in Indonesia," Journal of Human Resources, University of Wisconsin Press, vol. 28(4), pages 899-932.
    18. Vinod Mishra & Russell Smyth, 2012. "Returns to Schooling in Urban China: New Evidence Using Heteroskedasticity Restrictions to Obtain Identification Without Exclusion Restrictions," Monash Economics Working Papers 33-12, Monash University, Department of Economics.
    19. Hongbin Li & Pak Wai Liu & Ning Ma & Junsen Zhang, 2005. "Does Education Pay in Urban China? Estimating Returns to Education Using Twins," Discussion Papers 00013, Chinese University of Hong Kong, Department of Economics.
    20. Flabbi, Luca & Paternostro, Stefano & Tiongson, Erwin R., 2008. "Returns to education in the economic transition: A systematic assessment using comparable data," Economics of Education Review, Elsevier, vol. 27(6), pages 724-740, December.
    21. Ashish Lall & Chris Sakellariou, 2010. "Evolution of Education Premiums in Cambodia: 1997–2007," Asian Economic Journal, East Asian Economic Association, vol. 24(4), pages 333-354, December.
    22. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    23. Heckman, James J, 2003. "China's Investment in Human Capital," Economic Development and Cultural Change, University of Chicago Press, vol. 51(4), pages 795-804, July.
    24. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
    25. 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.
    26. Gao, Wenshu & Smyth, Russell, 2011. "Economic returns to speaking 'standard Mandarin' among migrants in China's urban labour market," Economics of Education Review, Elsevier, vol. 30(2), pages 342-352, April.
    27. Trostel, Philip & Walker, Ian & Woolley, Paul, 2002. "Estimates of the economic return to schooling for 28 countries," Labour Economics, Elsevier, vol. 9(1), pages 1-16, February.
    28. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
    29. Xiaolei Qian & Russell Smyth, 2008. "Private returns to investment in education: an empirical study of urban China," Post-Communist Economies, Taylor & Francis Journals, vol. 20(4), pages 483-501.
    30. Kang, Lili & Peng, Fei, 2012. "Siblings, public facilities and education returns in China," MPRA Paper 38922, University Library of Munich, Germany.
    31. Li, Hongbin & Meng, Lingsheng & Shi, Xinzheng & Wu, Binzhen, 2012. "Does attending elite colleges pay in China?," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 78-88.
    32. Elisa Rose Birch & Paul W. Miller, 2006. "How Does Marriage Affect the Wages of Men in Australia?," The Economic Record, The Economic Society of Australia, vol. 82(257), pages 150-164, June.
    33. Wang, Le, 2012. "Economic transition and college premium in urban China," China Economic Review, Elsevier, vol. 23(2), pages 238-252.
    34. Alan de Brauw & John Giles, 2017. "Migrant Opportunity and the Educational Attainment of Youth in Rural China," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 272-311.
    35. Meng, Xin & Gregory, Bob, 2007. "Exploring the Impact of Interrupted Education on Earnings: The Educational Cost of the Chinese Cultural Revolution," IZA Discussion Papers 2548, Institute for the Study of Labor (IZA).
    36. Björn Gustafsson & Shi Li, 2000. "Economic transformation and the gender earnings gap in urban China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(2), pages 305-329.
    37. CHEN, Guifu & HAMORI, Shigeyuki, 2009. "Economic returns to schooling in urban China: OLS and the instrumental variables approach," China Economic Review, Elsevier, vol. 20(2), pages 143-152, June.
    38. Le Wang, 2013. "How Does Education Affect the Earnings Distribution in Urban China?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(3), pages 435-454, June.
    39. vinod Mishra & Russell Smyth, 2010. "Economic Returns to Schooling for China’s Korean Minority," Monash Economics Working Papers 37-10, Monash University, Department of Economics.
    40. Zhang, Junsen & Zhao, Yaohui & Park, Albert & Song, Xiaoqing, 2005. "Economic returns to schooling in urban China, 1988 to 2001," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 730-752, December.
    41. Bishop, John A. & Chiou, Jong-Rong, 2004. "Economic transformation and earnings inequality in China and Taiwan," Journal of Asian Economics, Elsevier, vol. 15(3), pages 549-562, June.
    42. Tian Qiu & John Hudson, 2010. "Private returns to education in urban China," Economic Change and Restructuring, Springer, vol. 43(2), pages 131-150, May.
    43. Haizheng Li & Yi Luo, 2004. "Reporting errors, ability heterogeneity, and returns to schooling in China," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 191-207, October.
    44. Mishra, Vinod & Smyth, Russell, 2013. "Economic returns to schooling for China's Korean minority," Journal of Asian Economics, Elsevier, vol. 24(C), pages 89-102.
    45. Pencavel, John, 1998. "Assortative Mating by Schooling and the Work Behavior of Wives and Husbands," American Economic Review, American Economic Association, vol. 88(2), pages 326-329, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yamamura, Eiji & Smyth, Russell & Zhang, Yan, 2015. "Decomposing the effect of height on income in China: The role of market and political channels," Economics & Human Biology, Elsevier, vol. 19(C), pages 62-74.
    2. Gustafsson, Björn & LI, Shi & Sato, Hiroshi, 2014. "Data for studying earnings, the distribution of household income and poverty in China," China Economic Review, Elsevier, vol. 30(C), pages 419-431.
    3. Faqin Lin & Can Huang & Xiaobo He & Chao Zhang, 2013. "Do more highly educated entrepreneurs matter?," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 27(2), pages 104-116, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mos:moswps:2012-50. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simon Angus). General contact details of provider: http://edirc.repec.org/data/dxmonau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.