A selection analysis on education returns in China

Lili Kang and Fei Peng

MPRA Paper from University Library of Munich, Germany

Abstract: This paper estimates the economic returns to education in China from 1989 to 2009, using the China Health and Nutrition Survey (CHNS) dataset. We find that education returns for one additional year generally increase from 2.6% in 1989 to 7.9% in 2009. Education returns, however, may reflect signals of innate ability, or the accumulation of human capital. Moreover, traditional Ordinary Least Square estimates may be biased by selection problems and mix-ups of age group heterogeneity. Hence, we estimate the marginal effects of schooling with the increasing labour markets experience, using the Heckman Selection Model. We find that the education returns for one additional year decline with labour markets experience, which support human capital hypothesis for all age groups except the group educated during the “Cultural Revolution”. Different dynamics of education returns in the four age groups are identified with large influence of institutional reforms in the labour markets, supporting the transition explanation of the evolution of education returns in China.

Keywords: Education returns; China; Selection (search for similar items in EconPapers)
JEL-codes: C52 J24 J31 P23 (search for similar items in EconPapers)
Date: 2011-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://mpra.ub.uni-muenchen.de/38704/1/MPRA_paper_38704.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/44286/1/MPRA_paper_44286.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/44472/1/MPRA_paper_44472.pdf revised version (application/pdf)

Related works:
Journal Article: A selection analysis of returns to education in China (2012)
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