Earning Returns to Tertiary Education in Urban China, 1988-2005

by
YE, Hua
Division of Social Science, HKUST

Abstract:
The last decade has witnessed an unprecedented expansion of higher education in China, which has
generated a heated debate in the mass media, as well as scholarly research on the efficacy of China’s
educational expansion. Employing five data sets from surveys conducted between 1988 and 2005, this
study examines earnings returns to tertiary education over time. It is found that despite the dramatic
expansion of higher education in China, the credentials of tertiary education have not devalued. On the
contrary, earnings returns to tertiary education as compared to upper secondary education have even
increased until recently. Furthermore, it is found that there exists a gender earnings gap for people who
only attend secondary education, while the disadvantage of women in earnings becomes less prominent
once they complete tertiary education. In sum, attending tertiary education does pay off in China owing
to the existence of labor markets, especially for women.