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Endogenous schooling, school proximity and returns to rural schooling in Northwestern China

Author

Listed:
  • Qihui Chen
  • Jingqin Xu
  • Jiaqi Zhao
  • Bo Zhang

Abstract

Purpose - The purpose of this paper is to estimate the returns to rural schooling in China, addressing both endogeneity in rural individuals’ schooling and self-selection into off-farm work. Design/methodology/approach - This paper exploits geographical proximity to rural secondary schools to create instrumental variables (IV) for individuals’ years of schooling. It addresses both endogenous schooling and self-selection using the two-step procedure developed in Wooldridge (2002, p. 586). Findings - The preferred IV estimate of schooling returns, 7.6 percent, is considerably higher than most previous estimates found in rural China. Originality/value - This paper is among the few papers that examine returns to rural schooling in China while simultaneously addressing both endogeneity in individuals’ schooling and self-selection into off-farm work. Its findings suggest that rural education in China is potentially able to generate a respectable level of economic returns if policies are designed to provide greater school accessibility to rural individuals.

Suggested Citation

  • Qihui Chen & Jingqin Xu & Jiaqi Zhao & Bo Zhang, 2017. "Endogenous schooling, school proximity and returns to rural schooling in Northwestern China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 9(2), pages 270-286, May.
    • Handle: RePEc:eme:caerpp:caer-02-2016-0031
    DOI: 10.1108/CAER-02-2016-0031
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    Citations

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    Cited by:

    1. Qihui Chen, 2017. "Impacts of Late School Entry on Children's Cognitive Development in Rural Northwestern China—Does Preprimary Education Matter?," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 4(3), pages 586-601, September.
    2. Chengfang Liu & Ye Li & Shaoping Li & Renfu Luo & Linxiu Zhang & Scott Rozelle & Spencer Hagist & Jack Hou, 2020. "The returns to education in rural China: Some new estimates," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(1), pages 189-208, January.
    3. Qihui Chen & Chunchen Pei & Qiran Zhao, 2018. "Eating More but Not Better at School? Impacts of Boarding on Students’ Dietary Structure and Nutritional Status in Rural Northwestern China," Sustainability, MDPI, vol. 10(8), pages 1-18, August.
    4. Terry Sicular & Mengbing Zhu, 2022. "The Big Expansion of Rural Secondary Schooling during the Cultural Revolution and The Returns to Education in Rural China," University of Western Ontario, Departmental Research Report Series 202212, University of Western Ontario, Department of Economics.

    More about this item

    Keywords

    Rural China; Instrumental variables; School proximity; Schooling returns; C21; J24; J31; P25;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics

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