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Employer Learning and the Dynamics of Returns to Universities: Evidence from Chinese Elite Education during University Expansion

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  • Sylvie Démurger

    (IAO - Institut d'Asie Orientale - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - CNRS - Centre National de la Recherche Scientifique, GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique)

  • Eric A Hanushek

    (Stanford University)

  • Lei Zhang

    (Shanghai Jiao Tong University [Shanghai])

Abstract

This paper estimates the return to an elite university education over a college graduate's career in contemporary China. After allowing for university selectivity by including individual admission scores, we find a substantial premium for graduating from an elite Chinese university at the job entry that declines quickly in early career before starting to return. Results are entirely driven by cohorts entering college after the 1999 higher education expansion. The pattern is more pronounced in coastal provinces and in economically more developed regions. The results are consistent with predictions of asymmetric employer learning models.

Suggested Citation

  • Sylvie Démurger & Eric A Hanushek & Lei Zhang, 2023. "Employer Learning and the Dynamics of Returns to Universities: Evidence from Chinese Elite Education during University Expansion," Post-Print halshs-04351549, HAL.
    • Handle: RePEc:hal:journl:halshs-04351549
    DOI: 10.1086/727519
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04351549
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    Cited by:

    1. Hao, Zedong & Wang, Yun, 2022. "Education signaling, effort investments, and the market's expectations: Theory and experiment on China's higher education expansion," China Economic Review, Elsevier, vol. 75(C).
    2. Zhou, Jing & Chen, Huashuai, 2023. "Will reducing the burden of extracurricular tutoring raise fertility willingness in China? Five policy suggestions," Journal of Policy Modeling, Elsevier, vol. 45(6), pages 1132-1147.
    3. Borsi, Mihály Tamás & Valerio Mendoza, Octasiano Miguel & Comim, Flavio, 2022. "Measuring the provincial supply of higher education institutions in China," China Economic Review, Elsevier, vol. 71(C).
    4. Du, Xinming, 2023. "Competing with clean air: Pollution disclosure and college desirability," Ecological Economics, Elsevier, vol. 204(PA).
    5. Guo, Juncong & Qu, Xi, 2022. "Competition in household human capital investments: Strength, motivations and consequences," Journal of Development Economics, Elsevier, vol. 158(C).

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    More about this item

    Keywords

    China; employer learning; elite universities; College Expansion; earnings dynamics;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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