Rational Expectation and Education Rewarding: The Case of Chinese Off-Farm Wage Employment

Linke Hou, Xiaobing Wang and Xiaohua Yu

No 114530, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: This study establishes a life-cycle model that a representative agent chooses optimal time of education to maximize his/her life earning, which implies that there may exist nonlinear relation between education and earning. Using the data of Chinese off-farm wage employment, we find that the duration of schooling years will increase by 1.7 years with 1 percent increase in rate of return to education. The empirical results also indicate that controversies about return to education might arise from model misspecification without consideration of nonlinearity and sample selection.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 12
Date: 2011
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lab and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114530

DOI: 10.22004/ag.econ.114530

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