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Kimball's failed replication of Reinhart-Rogoff finding cited in argument for tempered public response to social science research results

Edin and Shaefer's book on destitute families in America reviewed in NYT

Johnston says rate of daily marijuana use among college students now greater than rate of daily cigarette smoking

Highlights

Deirdre Bloome wins ASA award for work on racial inequality and intergenerational transmission

Bob Willis awarded 2015 Jacob Mincer Award for Lifetime Contributions to the Field of Labor Economics

David Lam is new director of Institute for Social Research

Elizabeth Bruch wins Robert Merton Prize for paper in analytic sociology

Next Brown Bag

Monday, Oct 12
Joe Grengs, Policy & Planning for Social Equity in Transportation

Xiaogang Wu photo

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

Publication Abstract

Wu, Xiaogang, and Yu Xie. 2003. "Does the Market Pay Off? Earnings Returns to Education in Urban China." American Sociological Review, 68(3): 425-442.

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.

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