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The returns to education in rural China: Some new estimates
Author(s) -
Liu Chengfang,
Li Ye,
Li Shaoping,
Luo Renfu,
Zhang Linxiu,
Rozelle Scott,
Hagist Spencer,
Hou Jack
Publication year - 2020
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.12350
Subject(s) - earnings , rate of return , wage , estimation , economics , china , demographic economics , econometrics , labour economics , geography , finance , management , archaeology
We estimate the rates of return to education in rural China using primary survey data collected in 2016. Estimated average returns to education are 3.1 per cent. However, careful statistical analysis is required when estimating the returns to education. The paper demonstrates that when employment interruptions are accounted for, the measured returns to education rise. Our results also confirm that mismeasurement of the wage rate by using an hourly wage rate (versus daily or monthly earnings) raises the estimation of rates of return to education. Finally, our results suggest that the return to education is nonlinear in education levels but only when it reaches the tertiary level.