Working Paper: NBER ID: w25955
Authors: Sylvie Dmurger; Eric A. Hanushek; Lei Zhang
Abstract: This paper estimates the return to an elite university education over a college graduate’s career in contemporary China. We find a substantial premium for graduating from an elite Chinese university at the job entry that declines quickly in early career before starting to return subsequently. This pattern holds after allowing for university selectivity by including individual admission scores. It is entirely driven by the post-expansion cohorts who entered college after the higher education expansion that started in 1999. The pattern is more pronounced in coastal provinces and in economically more developed regions, where individual skills are highly rewarded in the labor market. The results are consistent with predictions of asymmetric employer learning models, both at the job entry and at the mid-career when individuals are up for promotions.
Keywords: elite university education; employer learning; China; wage dynamics; higher education expansion
JEL Codes: I20; I23; J2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| elite university attendance (I23) | initial wage premium at job entry (J31) |
| initial wage premium at job entry (J31) | decline of premium in early career stages (J26) |
| decline of premium in early career stages (J26) | employer learning about individual productivity (J24) |
| employer learning about individual productivity (J24) | recovery of initial wage premium at mid-career (J31) |
| elite university attendance (I23) | insignificant elite university premium at job entry when adjusted for Gaokao scores (D29) |
| employer learning (M51) | local labor market conditions influence returns to elite education (J24) |