An Empirical Study On The Rate Of Return To General Education And Vocational Education For Urban And Rural Residents

Under the new normal economic situation,China's industry has to upgrade.Technical-intensive industries and high-end service industries are the two major directions of China's industrial upgrading.However,while China's industrial upgrading at the same time,it faces the structural problem that many general capital people find it's difficult to have a job,because the labor market need more skilled people.To better explain this problem,we need to analyze China's current relationship between general education and vocational education.Because at present,China's general education pays more attention to the cultivation of general and academic talents,while vocational education pays more attention to the cultivation of specialized and skilled talents.And these two different types of education were distributed for the first time after the end of nine-year compulsory education.The selection of this type of education will have an important influence on the number of different types of talent in the country in the future.Therefore,studying the returns of different types of education in the senior high school stage,on the one hand,it can explain this kind of predicament in the labor market in China,and on the other hand,it can help them to reduce losses and increase education income,and provide some scientific references for those who want to directly join the work after graduating from senior high school.Firstly,this paper proposes three hypotheses based on the relevant theoretical.(1)Hypothesis 1: The highest level of education is senior high school,and those who receive vocational education have a higher education rate of return than those who receive general education.(2)Hypothesis 2: Women who have received general education or vocational education at the senior high school level may have a higher education return rate than men.(3)Hypothesis 3: There may be differences in the return rates of ordinary education and vocational education between urban residentsand rural residents in the senior high school.Secondly,in this paper I will use four years of data from the 2010-2015 China General Social Survey(CGSS),selects samples with the highest educational level at the senior high school,controls year and provinces differences,and divides the sample into full samples,urban and rural areas.For the categories,the following four econometric models are used for empirical analysis:(1)Model 1: Using the Mincer model based on the extended version of the least squares method(OLS)to consider seniority,ethnicity,and political aspects to estimate senior high school general education and occupation's benefits of education.(2)Model 2: Based on the extended version of the Mincer model,the cross-items of dummy variables of gender and educational level were added to analyze the effect of gender differences on the general education return rate.(3)Model 3: Use Heckman two-step method and consider the factors such as adding the residential area of the residents,the number of house property rights,etc.in the first step of the Probit model.The sample selection bias correction term is taken into the second step to solve the possible sample selection bias problem of the OLS method.(4)Model 4: On the basis of correcting the problem of sample selection bias,using the education level of the spouse as a tool variable,correcting possible endogenous problems of the OLS method.The research results of this thesis found that,firstly,under all the samples,the return rate of vocational education in senior high school was higher than that of ordinary education.Specifically,the returns for general education and vocational education,under the full sample there are 40.7% and 53.9%;under the urban sample there are 27.6% and 35.6%;under the rural sample there are 22% and 43.6%.Secondly,in the general education and vocational education at the senior high school level,compared with men,women receive a higher return on education.Thirdly,rural residents have more advantages in the rate of vocational education at the senior high school level,and urban residents have more advantages in the general education return rate at the senior high school level.Lastly,the estimated education return rateafter using the Heckman two-step method to correct the sample selection bias is slightly lower than the OLS estimated educational return rate.On the basis of solving the bias of sample selection,the educational return rate estimated by using spouse education as an instrumental variable to solve endogenous problems is higher than that estimated by OLS method.Finally,according to the research results of this paper,relevant policy recommendations are proposed.