Higher Education Expansion and Return to Education in China: Evidence from CGSS2005 and CGSS2013

Abstract

We conducted an empirical study to estimate the private internal rate of return to years of schooling (IRR) in China during the period after the implementation of higher education expansion policy using data from the Chinese General Social Survey data conducted in 2006 and 2014 (CGSS2005, CGSS2013). The major conclusions are as follows: first, from 2005 to 2013, IRR decreased from 8.6% to 7.8% for the whole sample, IRR decreased from 8.3% to 7.4% for men, and IRR decreased from 9.0% to 8.2% for women. Second, IRR values among various education category groups are different. IRR is greater for the high-level education group than that for the middle and low-level education groups in both 2005 and 2013. Third, to consider the impact of the higher education expansion policy on IRR, the IRR of the university graduates decreased from 15.4% (2005) to 11.2% (2013), whereas the IRR of the graduate school graduates rose from 10.1% (2005) to 19.0% (2013). The effect of the policy on IRR differs between the university and graduate school graduates. Fourth, the IRR is higher for women than for men. There is a gender disparity for IRR; IRR is different by ownership types, registration system types, industrial and regional groups in both 2005 and 2013.