Access to Higher Education and Inequality: The Chinese Experiment

Xiaojun Wang (), Belton Fleisher (), Haizheng Li and Shi Li ()

No 2823, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We apply a semi-parametric latent variable model to estimate selection and sorting effects on the evolution of private returns to schooling for college graduates during China’s reform between 1988 and 2002. We find that there were substantial sorting gains under the traditional system, but they have decreased drastically and become negligible in the most recent data. We take this as evidence of growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies has declined. The main policy implication of our results is that labor and education reform without concomitant capital market reform and government support for the financially disadvantaged exacerbates increases in inequality inherent in elimination of the traditional “wage-grid”.

Keywords: return to schooling; selection bias; sorting gains; financial constraints; heterogeneity; China; comparative advantage (search for similar items in EconPapers)
JEL-codes: J24 J31 O15 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2007-06
New Economics Papers: this item is included in nep-cna, nep-dev, nep-edu, nep-hrm, nep-lab, nep-sea and nep-tra
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Citations: View citations in EconPapers (26)

Published - published in: Economics of Education Review, 2014, 42, 78-92

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Working Paper: Access to Higher Education and Inequality: The Chinese Experiment (2009)
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