Who earns more? City hierarchy of earning returns to education among migrant workers in urban China

Abstract

According to urban economic theories, workers in more developed regions should have higher educational returns. However, studies on urban workers in China have shown mixed results on whether earning returns to education are higher in regions experiencing more economic growth. Meanwhile, there is a lack of evidence on this issue among migrant populations, which have rapidly increased in number during China's economic transition. To fill this void, this study investigated how educational returns among migrant workers are related to local economic development levels and industrial structures. Specifically, we used individual-level data obtained from 286 cities through the 2018 China Migrants Dynamic Survey and city-level data to conduct a multilevel linear regression analysis with random slopes. We thus found that earning returns to education were higher in cities under two conditions, including higher development and higher shares of tertiary industry. Moreover, this association was more pronounced among high-skill migrant workers than low-skill ones. As higher income is a primary driving force in migration, we suggest that future policies should further promote industrial restructuring rather than using discriminative administrative rules to guide migration flows.