Returns to Education in China:1989-2011

Using China Health and Nutrition Survey(CHNS) data between 1989 and 2011, this paper measures the returns to education in China based on the Mincer earnings function and reaches the following findings through an analysis of the tendency of continuous variations over a long timeframe: returns to education are on the rise within the range of samples both under relative and absolute scenarios; returns to different levels of education are characterized by increasing marginal return; no significant difference exists between the returns to junior middle school and the returns to primary school education. Further discussions consider that the requirements of job positions for the overall competence of personnel, differentiated decline of corporate demand for recruitment, lack of an evaluation system in the labor market, information asymmetry in the job market, the development strategy adopted in a particular stage of history and the current slow progress of economic transition have jointly led to the underemployment of college graduates and the great enthusiasm of parents investing in higher education for their children. Conclusions of this paper not only have important practical relevance to the ongoing implementation of China's innovation-driven development strategy, but offer inspirations for the new round of educational reform as well.

Education, Employment and Human Capital Investment in China: Reality and Expectation

With the national population census data and sample survey data of 1990,2000,2005,2010 and 2015,this paper examines the evolving relationship between education and unemployment,and carries out an empirical analysis on how such correlation affects the expected return on education.Our findings suggest that education can significantly reduce the risk of unemployment,but this effect varied over time during 1990-2015.Education’s effect in reducing unemployment significantly increased from 1990 to 2000,but diminished from 2005 to 2015,particularly for the young group.This paper arrives at the ex post return on education estimated with 1995,2002,2007 and 2013 data of the Chinese Household Income Project(CHIP)and calculates the expected return on education based on such data.Results indicate that from 1995 to 2007,the expected return on education kept on the rise until it peaked in 2007.For the young group aged 22-29,the expected return on education started to decline after 2002.This result is of great significance to unravelling return on education during China’s transition period and households’decisions to invest in education.

Returns to education in rural China

Based on one of the most widely used datasets by foreign-based sociologists,this paper examines the rate of returns to education in rural China.Compared with the previous studies that showed rather low rates in rural areas throughout the 1980s,this study finds a considerably higher rate in 1996.A chief contributor is the rapid non-agricultural development,which creates enormous upward mobility opportunities,particularly for the more educated.Due to the uneven economic development nationwide,the rate of returns to education varies widely across regions.In areas with less developed non-agricultural sectors,it remains low.In contrast,where off-farm employment is widespread,it is much higher.In addition,the labor market is functioning to allocate the more educated to better-paid jobs,but has yet to produce higher returns to education in non-agricultural sectors than in the agricultural sector.However,changes may be occurring in coastal regions.