Access to Higher Education and Inequality: The Chinese Experiment

Xiaojun Wang (), Belton M. Fleisher (), Haizheng Li () and Shi Li ()
Additional contact information
Haizheng Li: Georgia Tech
Shi Li: Chinese Academy of Social Sciences and IZA

No 2823, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We apply a semi-parametric latent variable model to estimate selection and sorting effects on the evolution of private returns to schooling for college graduates during China’s reform between 1988 and 2002. We find that there were substantial sorting gains under the traditional system, but they have decreased drastically and become negligible in the most recent data. We take this as evidence of growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies has declined. The main policy implication of our results is that labor and education reform without concomitant capital market reform and government support for the financially disadvantaged exacerbates increases in inequality inherent in elimination of the traditional "wage-grid".

Keywords: return to schooling; selection bias; sorting gains; heterogeneity; financial constraints; comparative advantage; China (search for similar items in EconPapers)
JEL-codes: J31 J24 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-dev, nep-edu, nep-hrm, nep-lab, nep-sea and nep-tra
Date: Written 2007-06
View list of references

Downloads: (external link)
ftp://repec.iza.org/RePEc/Discussionpaper/dp2823.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute for the Study of Labor (IZA)
Address: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Contact information at EDIRC.
Series data maintained by Mark Fallak ().