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The returns to education in rural China: Some new estimates

Author

Listed:
  • Chengfang Liu
  • Ye Li
  • Shaoping Li
  • Renfu Luo
  • Linxiu Zhang
  • Scott Rozelle
  • Spencer Hagist
  • Jack Hou
Abstract
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.

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  • Chengfang Liu & Ye Li & Shaoping Li & Renfu Luo & Linxiu Zhang & Scott Rozelle & Spencer Hagist & Jack Hou, 2020. "The returns to education in rural China: Some new estimates," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(1), pages 189-208, January.
    • Handle: RePEc:bla:ajarec:v:64:y:2020:i:1:p:189-208
    DOI: 10.1111/1467-8489.12350
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