Education expansion and returns to schooling in urban China, 2001–2010: evidence from three waves of the China Urban Labor Survey

Abstract

This study examines the effect of the expansion in education that occurred in the first decade of the twenty-first century on the returns to schooling in urban China for migrants and non-migrants using three waves of the China Urban Labor Survey (CULS), corresponding to 2001, 2005 and 2010. Our main finding is that the premium to education increased by about 2%–3% over a period in which there was a rapid increase in education levels. This result is consistent with the demand for skilled labor increasing at a time when China tries to move up the value-added chain and an observed increase in urban wage inequality. We find that the education premium is higher for non-migrants than migrants and higher for males than females.