Abstract
This paper focuses on the returns to education in China, and it aims to determine the returns rate difference between those in the rural and urban areas. Mincer’s model has been used as the base for the returns rate calculation. OLS has been chosen as the estimator for the regression analysis. The data set selected for analyzing was CHIP 2013, which is one of the latest national level education and income surveys conducted in China. The empirical analysis results showed that the rate of returns to education for the general samples was 13.9%. This, therefore, was higher than the rate (around 10%) in 2000-2010 in China. Meanwhile, the significant difference between rural (3.7%) and urban (25.6%) areas has been detected. The gender equality testing showed that in rural areas, the rate of returns to education for females (9.1%) was much higher than males (2.5%). The results provided an overview of the current situation regarding the educational investment in China. It also pointed out the income and educational inequality between rural-urban and male-female.
Highlights
1.1 Research BackgroundAfter China's reform and opening-up, China started its economic development in the real sense
The first one is the Chinese Household Income Project (CHIP) which was conducted by China Institute For Income Distribution in Beijing Normal University
The sample for the data set was drawn from 19,887 individuals from the urban areas and 39,065 individuals from the rural areas
Summary
After China's reform and opening-up, China started its economic development in the real sense. In the past ten years, China has experienced an extremely high-speed development economic growth. China has become the second largest economy in the world, which ranked only second to the United States. Some important indicators of residents' living quality, for instance, wages, non-wage incomes, assets, literacy rate, and quality of education has sharply increased along with the high-speed economic development. This paper will focus on the improvement of Chinese residents’ living quality, especially in terms of education and income. A significant indicator which measures the value of education and the connection between education and labor market, will be analyzed in the Chinese context
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