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Return to education and education mismatch in China

Nan, Jiarui 2023. Return to education and education mismatch in China. PhD Thesis, Cardiff University.
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This thesis examines the connection between education and individuals’ wages using China Family Panel Studies (CFPS) data, a national representative dataset provided by Peking University. In Chapter 3, we estimate the return to education in China using the Mincer (1974) wage equation. Most of the previous studies only focus on urban China, but we conduct a regional comparison of returns between urban and rural areas in our analysis. Significant and positive returns to education are found for all the waged workers in the Chinese labour market. The return to urban workers is 4.6%, which is 2.1% higher than that for rural workers, and the gap is tested to be highly significant under the OLS method. However, the urban/rural gap is largely moderated after controlling for the sample selection bias among rural workers. In Chapter 4, we examine the over-education condition for Chinese graduates doing waged jobs based on the fast expansion of Chinese higher education in recent decades. The over-education is defined as an individual’s obtained education level exceeding the job requirement. We find up to 40% of graduate workers in China are overeducated, and these individuals would suffer from a wage penalty from 17.9% to 26.7% across different measures of over-education, estimated from a revised Verdugo and Verdugo (1989) model. In addition, the effect of over-education on wages cannot be explained mainly by individuals’ skills heterogeneity. In Chapter 5, we further examine the various returns to education qualities and subjects for graduate workers to test whether the assumption of a homogeneous return to colleges is still satisfied in the Chinese labour market. It is estimated that graduates from key and ordinary universities enjoy significant wage premiums to those in colleges, with 39.3% and 14.0%, respectively. However, significant disparities in wages between different subject groups are not found.

Item Type: Thesis (PhD)
Date Type: Completion
Status: Unpublished
Schools: Business (Including Economics)
Subjects: H Social Sciences > H Social Sciences (General)
Uncontrolled Keywords: Return to education, Education mismatch, Education qualities and subjects, Cognitive and non-cognitive skills, Wage, Propensity Score Matching
Date of First Compliant Deposit: 27 June 2023
Last Modified: 27 Jun 2023 09:33

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