Height Premium in Earnings: Evidence from China

Abstract

The height premium has been studied worldwide for years using evidence from countries such as the Netherlands, Denmark, the UK, the USA, Vietnam, etc. This paper links adult height and schooling to salary using evidence from China. We use the data from three waves of the Chinese General Social Survey conducted in 2012, 2014, and 2016. Results suggest both significant returns to height and to schooling. We also found evidence of endogeneity in the education and schooling variables. Two-stage least squares (2SLS) methods were used to correct for endogeneity bias. The 2SLS methods yielded even larger returns to schooling and to height. The first stage equations explaining height and years of schooling found that greater parental education was generally associated with both greater height and more schooling. Being in rural areas had negative effects on both schooling and height. Cohort effects were not significant in the income equation, while they were important in both schooling and height equations. People born farther back in time and in areas of lower economic development (as measured by regional per capita GDP in childhood) had shorter stature and less education. This suggests that current levels of economic development and parental education can positively influence the height and education of children. This in turn can increase the future earnings of children in China.

Keywords: Height premium, future earnings, education