Employer Learning and the Dynamics of Returns to Universities: Evidence from Chinese Elite Education During University Expansion

45 Pages Posted: 20 Jun 2019

See all articles by Sylvie Démurger

Sylvie Démurger

Groupe d'Analyse et de Théorie Economique (GATE), CNRS, University of Lyon

Eric A. Hanushek

Stanford University - Hoover Institution on War, Revolution and Peace; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Lei Zhang

Antai College of Economics and Management, Shanghai Jiao Tong University

Multiple version iconThere are 2 versions of this paper

Date Written: June 2019

Abstract

This paper estimates the return to an elite university education over a college graduate’s career using the CHIP 2013 data. We find a substantial premium for graduating from an elite Chinese university at job entry, but it declines quickly with labor market experience. This pattern is entirely driven by the young cohorts who enter college after the higher education expansion that started in 1999. This pattern is more pronounced in coastal provinces and in economically more developed regions, where individual skills are highly rewarded in the labor market. The initial elite premium and its subsequent decline is found just for males; individual skills are much more consistently rewarded for females than males. The results are consistent with employer learning, where employers pay workers based on more easily observable group characteristics at job entry but rely less on these over time when more accurate information about individual productivity becomes available.

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Suggested Citation

Démurger, Sylvie and Hanushek, Eric A. and Zhang, Lei, Employer Learning and the Dynamics of Returns to Universities: Evidence from Chinese Elite Education During University Expansion (June 2019). NBER Working Paper No. w25955. Available at SSRN: https://ssrn.com/abstract=3406475

Sylvie Démurger (Contact Author)

Groupe d'Analyse et de Théorie Economique (GATE), CNRS, University of Lyon ( email )

93 Chemin des Mouilles
Ecully, 69130
France

Eric A. Hanushek

Stanford University - Hoover Institution on War, Revolution and Peace ( email )

Stanford, CA 94305-6010
United States
650-736-0942 (Phone)
650-723-1687 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Lei Zhang

Antai College of Economics and Management, Shanghai Jiao Tong University ( email )

HOME PAGE: http://sites.google.com/site/zlei89/

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