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

PSC In The News

RSS Feed icon

Elliott co-PI on new study examining how early environment impacts children's health

Levy says ACA has helped increase rates of insured, but rates still lowest among poor

Bruch reveals key decision criteria in making first cuts on dating sites

More News

Highlights

U-M ranked #4 in USN&WR's top public universities

Frey's new report explores how the changing US electorate could shape the next 5 presidential elections, 2016 to 2032

U-M's Data Science Initiative offers expanded consulting services via CSCAR

Elizabeth Bruch promoted to Associate Professor

Next Brown Bag

Mon, Oct 3 at noon:
Longevity, Education, & Income, Hoyt Bleakley

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.

Browse | Search : All Pubs | Next