Date of Award

5-2014

Document Type

Thesis

Degree Name

Master of Arts (MA)

Legacy Department

Economics

Advisor

Jerzmanowski, Michal

Committee Member

Espey , Molly

Committee Member

Wood , Daniel

Abstract

This study uses the most recent household survey data from 2007 to estimate return to education in urban China. Most existing literature are based on the data from 1990s and early 2000s and find that the rate of return to education in urban China has experienced a rapid increase. This study investigates whether the return to education is still in an increasing trend in later 2000s and how the return to education changed in recent years. The estimates of return in this study are lower than the findings in early 2000s. The higher education expansion started in 1999 made unbalance supply and demand in labor market, leading to unemployment for college graduates. This will reduce the over all return to education. Based on the survey data from 2007, the return to education for male and female do not show a significant difference. The return to education will be underestimated when using annual earning instead of hourly wage, especially for workers in private ownership sector, since the working hour bias the result. Finally, the return to education in province with advantage in education is higher than poor education province. Inequality of education is one of the factor influence the return to education and income distribution.

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