three essays on college earnings premium and china
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University of Kentucky
UKnowledge
Theses and Dissertations--Economics Economics
2018
THREE ESSAYS ON COLLEGE EARNINGS
PREMIUM AND CHINA’S HIGHER
EDUCATION EXPANSION
Chenxu Hu
University of Kentucky, chenxu.hu@uky.edu
Digital Object Identifier: https://doi.org/10.13023/etd.2018.319
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Recommended Citation
Hu, Chenxu, "THREE ESSAYS ON COLLEGE EARNINGS PREMIUM AND CHINA’S HIGHER EDUCATION EXPANSION"
(2018). Theses and Dissertations--Economics. 37.
https://uknowledge.uky.edu/economics_etds/37
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REVIEW, APPROVAL AND ACCEPTANCE
The document mentioned above has been reviewed and accepted by the student’s advisor, on behalf of
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advisory committee. The undersigned agree to abide by the statements above.
Chenxu Hu, Student
Dr. Chris Bollinger, Major Professor
Dr. Josh Ederington, Director of Graduate Studies
,THREE ESSAYS ON COLLEGE EARNINGS PREMIUM AND CHINA’S
HIGHER EDUCATION EXPANSION
DISSERTATION
A dissertation submitted in partial
fulfillment of the requirements for
the degree of Doctor of Philosophy
in the College of Business and
Economics at the University of
Kentucky
By
Chenxu Hu
Lexington, Kentucky
Director: Dr. Chris Bollinger, Professor of Economics
Lexington, Kentucky 2018
THREE ESSAYS ON COLLEGE EARNINGS PREMIUM AND CHINA’S
HIGHER EDUCATION EXPANSION
My dissertation consists of three essays that study the college premium in China and
how it has been affected by China’s higher education expansion.
In the first essay, I utilize the high education expansion as exogenous source to
estimate the college premium. The rapidly changing access to college provides a
rare opportunity to estimate a local treatment effect (LATE) of college education
on earnings by utilizing the drastic increase in college admission rate in 1999. I
also utilize the yearly admission rate as an instrumental variable for the endogenous
college education. Using China Household Income Project 2013, the two IV estimates
of college premium are 75.7 and 57.5 log points respectively.
The second essay examines the trends of the college earnings premium by age
groups from 1995 to 2013 in China. Specifically, based on China Household Income
Projects, the college premium for the younger group (age 25-34) stagnated, while the
college premium for the older group (age 45-54) increased substantially. I attribute
the stagnation for the younger group to the fast-growing relative supply of younger
college workers due to China’s higher education expansion. Holding the age cohort
and survey year constant, a one unit increase in log relative size of college workers
leads to 10.3 log points decrease in college premium.
The third essay further explores the channel through which the cohort size af-
fects the college premium. Using Blinder-Oaxaca decomposition, I find that, for all
survey years and age groups, the differential of the higher-skilled occupations share
between college and non-college educated workers only explains a small part of col-
lege premium, 10%-30%. The part due to the higher-skilled occupational premium is
negligible. Over 70% of the college premium is contributed by the college premium
among the workers with lower-skilled occupations.
KEYWORDS: College Premium; Higher Education Expansion; China; Cohort Size;
Occupation
Author’s signature: Chenxu Hu
Date: July 26, 2018
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