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Signaling or Skill Building? Estimating the Returns to China’s Double First-Class Initiative

Author

Listed:
  • Yanli Liu

    (Department of Economics, Towson University)

  • Kun Li

    (School of Economics, Sichuan University)

  • Yanchi Zou

    (School of Economics, Sichuan University)

Abstract

We estimate the labor-market returns to China’s Double First-Class (DFC) initiative using a difference-in-differences design that exploits discipline-level exposure among newly designated universities. Using university-level salary data from 2012-2021, we find that DFC designation increases graduates’ average monthly salaries by approximately 338 CNY. Event-study estimates reveal an immediate post-announcement increase, consistent with signaling, and larger effects for cohorts with longer exposure, suggesting human-capital accumulation. We find no evidence of institution-wide spillovers or effects for graduates who completed their studies prior to the policy announcement.

Suggested Citation

  • Yanli Liu & Kun Li & Yanchi Zou, 2026. "Signaling or Skill Building? Estimating the Returns to China’s Double First-Class Initiative," Working Papers 2026-01, Towson University, Department of Economics, revised Mar 2026.
    • Handle: RePEc:tow:wpaper:2026-01
    as

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    References listed on IDEAS

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    4. Seamus McGuinness, 2003. "University quality and labour market outcomes," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1943-1955.
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    Keywords

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    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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