The Impact of College Quality on Early Labor Market Outcomes in China

This study aims to explore the impact of college quality on early labor market outcomes in China, including the fresh college graduates' initial employment status and starting wages for students who graduated in 2011. The main data source is the College Student Labor Market (CSLM) survey conducted by Tsinghua University.;Distinguished from previous Chinese studies that merely utilized the broad and abstract college quality categories to measure college quality in China, input-based school resource indicators, including faculty-student ratio, proportion of faculty members holding doctoral degrees, average freshman National College Entrance Examination (NCEE) score, and teaching expenditure per student are collected to measure college quality in China for the first time.;To identify the causal effect of college quality, the instrumental variable approach and the propensity score matching method are employed to account for the endogeneity of elite college attendance in addition to the traditional ordinary least squares (OLS) regression. To explore the heterogeneous effect of college quality varying by student and family background characteristics, a series of interaction terms are generated in the OLS regressions. The quantile regressions are employed to explore the effect of college quality varying by earning distribution. Moreover, the Heckman correction approach is used to test for potential sample selection bias.;This study finds solid evidence that elite college attendance generally has a positive and statistically significant effect on the initial employment status and starting salaries for fresh college graduates who intend to work after college graduation. I find weak support for the existence of heterogeneous effect of college quality. Less-capable students tend to benefit more from attending elite colleges. However, the impact of college quality does not seem to vary by graduates' earning distribution. When using the input-based college quality measures, the results suggest that the quality gap does exist between elite and non-elite colleges in China and the major finding that there is a positive impact of college quality on the starting salary still holds. Some input indicators have stronger correlations with college graduates' starting wages than others.