An Empirical Study On Rate Of Return To Education Of Human Capital In China's Public Sector

Segmentation and discrimination can depress wage and maintain a low return to education in parts of the labour market. The publc sector, meanwhile, was regarded as one of those negitve roles in a transitional economy in the past century, and China's market economy illustrated the same hypothesis either. However, the new evidences have revealed a pleasant trend of China's SOEs in terms of ROR (Rate of Return to human capital) since the late 1990s. In this paper, we conduct an empirical study based on the data base of 2002 and in the frame work of Mincers'wage function. From the perspective of the dialectical materialism, our interpretation of returns to education considers both the necessity of the formation of low returns in the economic reform by the analyses of laid-off workers in the retrenchment program, and the positive aspect of the human capital at present. We also examine the mechanism of how cohorts and different level of education affecte ROR in China as an explaination of low ROR in SOEs. The linkage of human capital and ownerships mainly presented on the following conserns:The returs to human capital in public sectors have been rising since the middle 1990s, and may surpassed the private enterprises in 2002 not only in terms of ROR but also with less discrimination and a more proper behavior of income distribution; the depressed wage and low returns to education were acturally helping China to proceed an high speed intial industrialization when the labour force was the plentiful while capital was scarce. However, the millions of laid-off workers in the retrenchment program contributed to the development of human capital by sacrificing themselves.Therefore, SOEs'negative behavior in human capital can be interpreted by cohorts'variations or other historic reasons rather than widely spread believes of less free marketization. And the new evidence of public sector clarifies that ownership can not measure efficiency, since the ownership stands still, but the ROR, which may represents many economic implications such as the mobility of workers, havs been improved and even surpass the pure market sector of private enterprises since the institutional reform conducted. Theoretically, it can be developed continually by systematical innovation of modern corporate governance rather than simple privatization.This work has important significance on clearly understanding the behaviors of SOEs in 2000's and relation of public sector to market economy. The thesis introduced a special measurement of the concern of the educational equity, and a possible mechanism which could explain the outcome of the empirical analysis based on the measurement. The data is derived from the frequency of certain words we concerned in several kinds of materials such as academic journals, news papers and other publications. The empirical outcome proves the more educational resources supplied, the more important and scarce the resources reflected in people's mind. The main conclusion is that the concern of education can not demonstrate the drawbacks of our education system; by contrast, the development of the education tends to stimulate more concern in the context of the era of knowledge economy.