PUBLICATIONS & REPORTS

PUBLICATIONS & REPORTS

Use of Education Disruptions to Identify Heterogeneous Returns to Schooling in Urban China: The Great Proletarian Cultural Revolution as an Instrument

Author John Giles, Albert Park, Juwei Zhang
Date of Publication 2003. 12
No. 2003-39
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Contents Introduction

We use disruptions to educational attainment during China’s tumultuous Cultural Revolution to identify returns to elementary, middle school and post-secondary education. We make use of data from a unique survey, developed and implemented by the authors, that features information on shocks to education, and a rich set of proxies for unobserved ability (parent and sibling characteristics and a life skills test) and school quality (school location and school type) to estimate alternative OLS and IV estimates of returns to education. We find evidence of considerable heterogeneity in returns to education in China: point estimates of the return to a year of college education are 16.4 percent, while the return to a marginal year of middle school education is but 8.4 percent, and returns to a year of elementary education are insignificant with a point estimate of just 3 percent. Our findings support arguments in favor of increasing subsidies for primary and secondary education, and for developing a student loan program to support post-secondary education.