Year of Publication

2018

Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation

College

Business and Economics

Department

Economics

First Advisor

Dr. Chris Bollinger

Abstract

My dissertation consists of three essays that study the college premium in China and how it has been affected by China’s higher education expansion.

In the first essay, I utilize the high education expansion as exogenous source to estimate the college premium. The rapidly changing access to college provides a rare opportunity to estimate a local treatment effect (LATE) of college education on earnings by utilizing the drastic increase in college admission rate in 1999. I also utilize the yearly admission rate as an instrumental variable for the endogenous college education. Using China Household Income Project 2013, the two IV estimates of college premium are 75.7 and 57.5 log points respectively.

The second essay examines the trends of the college earnings premium by age groups from 1995 to 2013 in China. Specifically, based on China Household Income Projects, the college premium for the younger group (age 25-34) stagnated, while the college premium for the older group (age 45-54) increased substantially. I attribute the stagnation for the younger group to the fast-growing relative supply of younger college workers due to China’s higher education expansion. Holding the age cohort and survey year constant, a one unit increase in log relative size of college workers leads to 10.3 log points decrease in college premium.

The third essay further explores the channel through which the cohort size affects the college premium. Using Blinder-Oaxaca decomposition, I find that, for all survey years and age groups, the differential of the higher-skilled occupations share between college and non-college educated workers only explains a small part of college premium, 10%-30%. The part due to the higher-skilled occupational premium is negligible. Over 70% of the college premium is contributed by the college premium among the workers with lower-skilled occupations.

Digital Object Identifier (DOI)

https://doi.org/10.13023/etd.2018.319

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