Abstract
obtain sizeable positive external returns to education for the whole population. They argue that their instrument “is expected to be valid based on the assumption that the provincial number of ‘211’ universities impacts on individual wages only through its effect on the share of college graduates in that province while all else is equal. Because a province with more ‘211’ universities is always a more attractive place to study and work, it is quite natural that more college graduates would enter the labor market there.” In fact, the other way around might also be true: Namely, a place with a higher level of development (and wage rate) may have better financial and human resources and hence more “211” universities.
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