Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Kruger says reports of phantom mobile phone ringing/vibrating more common among anxious

Stafford says too early to say whether stock market declines will curtail Americans' spending

Eisenberg says many colleges now train campus personnel to spot and refer troubled college students

Highlights

Call for papers: Conference on Integrating Genetics and the Social Sciences, Oct 21-22, 2016, CU-Boulder

PRB training program in policy communication for pre-docs. Application deadline, 2.28.2016

Call for proposals: PSID small grants for research on life course impacts on later life wellbeing

PSC News, fall 2015 now available

Next Brown Bag

Monday, Feb 1 at noon, 6050 ISR-Thompson
Sarah Miller

Xiaogang Wu photo

Does the Market Pay Off? Earnings Inequality and Returns to Education in Urban China

Publication Abstract

Download PDF versionWu, Xiaogang, and Yu Xie. 2002. "Does the Market Pay Off? Earnings Inequality and Returns to Education in Urban China." PSC Research Report No. 02-500. April 2002.

Previous work on the market transition debate has missed the direct link between individuals' labor market history and individuals' labor market outcome. In this paper, we develop a typology of workers based on their labor market histories. We propose a model of selective transition of workers from the state sector to the market sector as an alternative explanation for the increases in earnings inequality and in earnings returns to education in reform-era China. Analysis of data from an urban survey data in China reveals that commonly observed higher returns to education in the market sector are limited to recent market entrants. It also shows that the seemingly higher returns to education for recent market entrants result from the aggregation of two very different types of workers: those who were "pushed" and those who "jumped" into the market. Pooling these two subgroups would yield high rates of returns to education in the market sector. The results challenge the prevailing wisdom that education is necessarily more highly rewarded by the market sector. We conclude that higher returns to education in the market sector of a transition economy cannot be construed as caused by marketization per se, and that the sorting process of labor markets helps explain the sectoral differential.

Browse | Search : All Pubs | Next