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Estimating the External Returns to Education: Evidence from China
Author(s)
Date Issued
2012-08
Date Available
2012-09-27T14:12:09Z
Abstract
Good understanding on the human capital externalities is important for both policy
makers and social science researchers. Economists have speculated for at least a century that the social returns to education may exceed the private returns. In this paper, using the longitudinal data from China Health and Nutrition Survey (CHNS), we examine
how individual wage changes associated with the share of college graduates in the same province across years for a person who has never moved by implementing individual fixed effects estimates. The individual fixed effect model shows that the external returns to education in China appear to be negative and on the order of -2%, which might be biased by potential endogeneity. Concerned with this problem, we then implement the IV fixed effect estimates and find positive external returns to education at about 10%. We also find this returns differ across individual heterogeneity.
Sponsorship
Not applicable
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP12/20
Subject – LCSH
Wages--College graduates--China
Wages--Effect of education on--China
Externalities (Economics)
Education--Social aspects--China
Web versions
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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