Using various estimation techniques, a new GLO Discussion Paper finds that returns to education in China experienced a slight decrease in 2010-2015, but reverted back in 2017. University education remained to have higher returns than those to secondary or compulsory education.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
GLO Discussion Paper No. 787, 2021
“Study hard and make progress every day”: Updates on returns to education in China – Download PDF
by Chen, Jie & Pastore, Francesco
GLO Fellow Francesco Pastore and GLO Affiliate Jie Chen
Author Abstract: In this paper, we apply Generalized Propensity Score matching (GPSM) method, which deals with a continuous treatment variable, to estimate the returns to education in China from 2010 to 2017. Results are compared with OLS estimates from the classical Mincerian equation, as well as estimates from two instrumental variable methods (i.e., 2SLS and Lewbel). We use the Chinese General Social Survey data, including a subset newly released in 2020. We find that returns to education in China experienced a slight decrease in 2010-2015, but reverted back in 2017. With the more flexible GPSM method, we also find that returns to university education remain higher than returns to secondary or compulsory education. The GPSM estimates are also closer to OLS estimates, compared to both instrumental variable methods.
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.