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

PSC In The News

RSS Feed icon

Weir's 2009 report on NFL brain injuries got more attention than neurological findings published in 2005

Edin and Shaefer's book a call to action for Americans to deal with poverty

Weir says pain may underlie rise in suicide and substance-related deaths among white middle-aged Americans


MCubed opens for new round of seed funding, November 4-18

PSC News, fall 2015 now available

Barbara Anderson appointed chair of Census Scientific Advisory Committee

John Knodel honored by Thailand's Chulalongkorn University

Next Brown Bag

Monday, Dec 7 at noon, 6050 ISR-Thompson
Daniel Eisenberg, "Healthy Minds Network: Mental Health among College-Age Populations"

Yu Xie photo

Market Premium, Social Process, and Statistical Naivety: Further Evidence on Differential Returns to Education in Urban China

Publication Abstract

Download PDF versionXie, Yu, and Xiaogang Wu. 2005. "Market Premium, Social Process, and Statistical Naivety: Further Evidence on Differential Returns to Education in Urban China." PSC Research Report No. 05-578. July 2005.

In an article published in the American Sociological Review (Wu and Xie, 2003), we addressed the substantive question of whether or not higher earnings returns to education in the market sector than in the state sector in reform-era China are caused by the market mechanism. Developing a typology of workers based on their labor market histories, we proposed a model of selective transition of workers from the state sector to the market sector as an alternative explanation for higher earnings inequality and higher earnings returns to education in the market sector. Our main empirical results showed that later market entrants have significantly higher returns to education than state sector stayers, whereas we found insufficient statistical power in the data with which to differentiate the education returns of early market entrants from those of either later entrants or stayers

In this paper, we address comments made by Jann (2005) about our article and his naive use of statistical tests in evaluating our findings. We reconceptualize the problem and illustrate the power of causal analysis using the propensity score method, which depends on the ignorability assumption. In considering two groups – early and late entrants to the market sector – our results suggest a strong selection mechanism at work. That is, when workers with a low latent propensity of making a transition indeed did make a late transition to the market sector, they benefited the most from the transition. In other words, the story is more about under what conditions workers migrated to the market sector than how workers benefit from migrating to the market sector.

Country of focus: China.

Browse | Search : All Pubs | Next