Returns to Schooling in China Under Planning and Reform

We estimate returns to schooling using a retrospective work history survey covering more than 4,000 workers over the period 1950 to 1994, with particular emphasis to the returns to schooling for workers who attended institutes of higher education and who graduated from college. We find evidence that schooling returns declined throughout the period leading up to the Cultural Revolution (CR), with returns for workers who did not attend college becoming negligible. Returns to those with some college education remained positive, but low compared to other countries. Consistent with other studies, we find that returns to schooling did not recover from their CR low until the 1990s. Increases in the return to schooling during the transition following the CR were not associated directly with workers changing jobs or with taking “new-economy” jobs but appear to have occurred for most workers across all ownership categories. Workers most likely to leave jobs in the traditional ownership sector for jobs in the private or jointventure categories were those who entered the labor force prior to 1967. We do not find evidence supporting other studies’ finding that schooling returns for college graduates increased more than for workers with lower levels of schooling attainment.http://deepblue.lib.umich.edu/bitstream/2027.42/40090/3/wp704.pd

Are Patent Laws Harmful to Developing Countries? Evidence from China

Has upgrading and enforcing its patent laws slowed China’s economic growth? The answer we draw from detailed analysis of provincial aggregate data covering roughly the period 1990 through 2007 is strongly negative, but understanding the channels through which stricter protection of intellectual property rights has contributed to more rapid productivity growth is elusive. Our best estimate of the direct impact of the 1992 and 2001 patent laws on TFP growth amounts to not quite 15 percent of the average TFP growth rate over the period, but a much larger share of TFP growth is associated with enactment of the laws in a simple interpretation of our empirical investigation. We estimate that virtually none of the laws’ impact on TFP growth can be directly associated with increased quantity of FDI or R&D, although both series are strongly positively correlated with promulgation of the patent laws. We infer that amount of technology transfer through a FDI and the focus of R&D activity, decline of state ownership and increased marketization, growth of the human capital stock, and movement of the labor force from agriculture to manufacturing and service industries are all processes that were encouraged and whose effect has been magnified by stronger IPR protection. Moreover, adopting and enforcing the patent laws probably cannot be treated as an independent event with causation running in only one direction to China’s economic development..Patent law, Intellectual Property Rights, TRIPS, TFP Growth

Returns to Schooling in China Under Planning and Reform

We estimate returns to schooling using a retrospective work history survey covering more than 4,000 workers over the period 1950 to 1994, with particular emphasis to the returns to schooling for workers who attended institutes of higher education and who graduated from college. We find evidence that schooling returns declined throughout the period leading up to the Cultural Revolution (CR), with returns for workers who did not attend college becoming negligible. Returns to those with some college education remained positive, but low compared to other countries. Consistent with other studies, we find that returns to schooling did not recover from their CR low until the 1990s. Increases in the return to schooling during the transition following the CR were not associated directly with workers changing jobs or with taking “new-economy” jobs but appear to have occurred for most workers across all ownership categories. Workers most likely to leave jobs in the traditional ownership sector for jobs in the private or jointventure categories were those who entered the labor force prior to 1967. We do not find evidence supporting other studies’ finding that schooling returns for college graduates increased more than for workers with lower levels of schooling attainment.returns to schooling, skills, China

The China Great Leap Forward Famine: The Lasting Impact of Mothers’ Fetal Malnutrition on Their Offspring

Mothers born around the China Great Leap Forward Famine (famine-born mothers) are likely to have worse adult outcomes due to a negative relationship between fetal malnutrition and their health and cognitive ability. Using data from the China Health and Nutrition Survey, I investigate whether famine-born mothers transmit less human capital to their offspring through various channels, including less cognitive ability and other innate traits and by the choice of less investment in children’s human capital. My study also focuses on possible gender differences in these effects. I find that in-utero famine experience of famine-born mothers is negatively related to the education and labor outcomes of their offspring. However, female children are less affected by mothers’ famine experience than are men. This outcome suggests that Trivers-Willard (1973) effects dominate parental-choice effects despite the well-known son-preference of China.Gender difference, Malnutrition, Health, Labor Market Outcomes, Schooling, Barker hypothesis, Trivers-Willard hypothesis, China Famine

Off-Farm Employment Opportunities and Educational Attainment in Rural China

Labor and Human Capital,

Human Capital, Economic Growth, and Regional Inequality in China

We study the dispersion in rates of provincial economic- and TFP growth in China. Our results show that regional growth patterns can be understood as a function of several interrelated factors, which include investment in physical capital, human capital, and infrastructure capital; the infusion of new technology and its regional spread; and market reforms, with a major step forward occurring following Deng Xiaoping’s “South Trip” in 1992. We find that FDI had much larger effect on TFP growth before 1994 than after, and we attribute this to emergence of other channels of technology transfer when marketization accelerated. We find that human capital positively affects output per worker and productivity growth. In particular, in terms of its direct contribution to production, educated labor has a much higher marginal product. Moreover, we estimate a positive, direct effect of human capital on TFP growth. This direct effect is hypothesized to come from domestic innovation activities. The estimated spillover effect of human capital on TFP growth is positive and statistically significant, which is very robust to model specifications and estimation methods. The spillover effect appears to be much stronger before 1994. We conduct cost-benefit analysis and a policy “experiment,” in which we project the impact increases in human capital and infrastructure capital on regional inequality. We conclude that investing in human capital will be an effective policy to reduce regional gaps in China as well as an efficient means to promote economic growth.http://deepblue.lib.umich.edu/bitstream/2027.42/57237/1/wp857 .pd

Returns to Skills and the Speed of Reforms: Evidence from Central and Eastern Europe, China, and Russia

We explore the pace of increase in returns to schooling during the transition from planning to market over time across a number of Central and Eastern European countries, Russia, and China. We use metadata from 33 studies of 10 transition economies covering a period from 1975 through 2002. Our empirical model is an attempt to account for cross-section and over-time variation in rates of return as a function of the timing, speed, and volatility of reform processes as well as estimation methods used and sample characteristics. Our principal aim is to investigate the relative strength of two hypotheses: (1) the speed of economic transformation from planning to market represent the relaxation of legal, regulatory, and institutional constraints on wage-setting behavior, leading directly to adjustment returns to schooling to market rates; 2) the rapid increase in returns to schooling during the early reform period reflects the ability of highly-educated individuals to respond to changing opportunities in a disequilibrium situation. We find that both the speed of reforms and the degree of economic disequilibrium as reflected in macroeconomic volatility help to explain cross-country differences in the time paths of the returns to schooling. We report the systematic effects of sample characteristics, estimation methods, and model specifications on estimated returns to schooling.http://deepblue.lib.umich.edu/bitstream/2027.42/40089/3/wp703.pd

Sorting, Selection, and Transformation of the Return to College Education In China

We estimate selection and sorting effects on the evolution of the private return to schooling for college graduates during China’s reform between 1988 and 2002. We pay special attention to the changing role of sorting by ability versus budget-constraint effects as China’s education policy has changed from one in which the bulk of direct costs are paid by government for students who pass a rigid set of test to one in which freedom of choice is increasingly the rule for those who can afford to pay for tuition and living expenses while acquiring higher education. We find evidence of substantial sorting gains under the traditional system but that gains have diminished and even become negative as schooling choices widened and participation has become subject to increasing direct private costs. We take this as evidence consistent with the influence of financial constraints on decisions to attend college.http://deepblue.lib.umich.edu/bitstream/2027.42/40142/3/wp756.pd

Evaluating Methods for Evaluating Instruction: The Case of Higher Education

This paper develops an original measure of learning in higher education, based on grades in subsequent courses. Using this measure of learning, this paper shows that student evaluations are positively related to current grades but unrelated to learning once current grades are controlled. It offers evidence that the weak relationship between learning and student evaluations arises, in part, because students are unaware of how much they have learned in a course. The paper concludes with a discussion of easily-implemented, optimal methods for evaluating teaching.

Evolution of the Industrial Wage Structure in China Since 1980

Industry mean wages in China have exhibited sharply increased dispersion since the early 1990s. The upward trend in differences of average wages among major industry groups parallels increases in wage and income inequality not only between rural and urban sectors but within the urban economy as well. Research on the trend has focused on (1) how market forces have led to a better match between worker pay and worker skills; on (2a) how the growing share of employment in the private sector has “caused” growing wage inequality; and (2b) how residual government control in a few industrial sectors has contributed to wage inequality due monopoly rent sharing. We show that the industrial wage dispersion in China has evolved to match long-recognized international patterns of industrial wage dispersion and that an increasing proportion of industrial wage dispersion can be explained as returns to observed worker characteristics.inequality, China, industry-wage structure