Heterogeneity, Selection and the Policy Effect of Educational Expansion on Earnings in Reforming China, 1981-2010

• In Event: 2484 - Section on Sociology of Education Refereed Roundtable Session
  In Refereed Roundtable 60min: Table 06. Education in Asia

Abstract

This paper examines the social origin heterogeneity in the college premium in the context of educational expansion. Considering that both the quantity and quality of college graduates have changed under educational expansion, it provides an identification strategy to estimate the treatment effects in a double-treatment setting: the 1999 college expansion in China. Specifically, to determine who have been truly affected by the expansion policy, it adopts the marginal treatment effect framework to identify the causal effect of college on labor market outcomes, and use a difference-in-difference approach to identify the policy effect of educational expansion. By using a variety of national representative survey data on reforming China, it finds that the “true” college premium is rather small for the after-expansion cohort, as much of the change in the college premium is due to changes in the composition of ability among the college graduates. Results also show that college premium declines more after the expansion for rural children in the top percentiles than for their urban counterparts. It is thus the rural children of the top percentiles that fall behind in the college premium under China’s recent educational expansion.

Author

• Maocan Guo, Harvard University