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

Sylvie Démurger
Eric A. Hanushek
Lei Zhang
Published Date
Economic Development and Cultural Change

This paper estimates the return to an elite university education over a college graduate’s career in contemporary China. After allowing for university selectivity by including individual admission scores, we find a substantial premium for graduating from an elite Chinese university at the job entry that declines quickly in early career before starting to return. Results are entirely driven by cohorts entering college after the 1999 higher education expansion. The pattern is more pronounced in coastal provinces and in economically more developed regions. The results are consistent with predictions of asymmetric employer learning models.