College Rankings and Return to Tertiary Education in China

Open Access
Author:
Lin, Yuxiang
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Russell Wade Cooper, Thesis Supervisor
  • James R. Tybout, Honors Advisor
Keywords:
  • China
  • Education Return
  • College Rankings
  • Education quality
  • CHIPs
  • gaokao
Abstract:
This paper studied the relationship between school rankings and tertiary education returns in China. By using Chinese Household Income Project (CHIP) data, the study was able to include new CHIP 2007 data, and add tertiary school rankings into 2002 regression. The characteristics of Chinese higher education system and Gaokao were explained in detail. According to unique features of Gaokao, a three period discrete choice education demand model was introduced. The paper then set out to test the model, paying special attention to omitted-variable bias by forming parental education as a proxy variable to estimate unobservable individual abilities. Attending high ranking schools showed 5.97 estimated increase of personal earnings compared to attending middle ranking schools. Running age specific and ability specific regressions showed attending high ranking schools yield significantly higher earnings for younger individuals and lower ability individuals.