The Impact Of School And Family Factors On Urban Residents' Rate Of Returns To Education

China is the biggest developing country,the relationship between Chinese residents'income and their education are widely concerned.Most researches use the rate of return to education to measure the impact of education on individual income.The rate of return to education are used to measure future income because of recent learning experience.Mincer income model is the most popular method to study the rate of return to education.This model connects individual income with year of education and work experience.However,researches related to school quality and family background are rare because of limited obtained data.In order to improve the development of education,this paper studies the impact of school and family factors on rate of return to education in China.Limited by obtained data and research method,research on the relationship between hidden abilities and rate of return to education are not enough.However,the heterogeneity caused by hidden abilities is an important factor which is one of the sources of bias when estimating rate of return to education.Most researches try to drop this bias by using more advanced methods.But this method does not explain the influence of hidden abilities.This paper hold that hidden abilities are difficult to measure,but this abilities are influenced by the experience before working.Since this paper try to replace the hidden abilities by factors which will impact individual abilities before working.These factors include school factor and family factor,such as college quality,high school quality,personal performance at school,parental professional status and their income.Based on detailed micro-data of CHIP2007 and CHIP2013,this paper analyses the relationship between school and family factors and rate of return to education.For further research,this paper also uses stepwise method and relative importance analysis in the process towards the results.As the estimating results,this paper finds parental income and children income are obvious positive related,which shows the inter-generational transfer of wealth between parents and children.Parental high occupational status and income of children are negative related,which is caused by the lack of family education.College quality and personal performance have obvious impact on rate of return to education while the influence of high school quality is not significant.By comparing the estimation results of CHIP2007 and CHIP2013,the influence of college quality is increasing.Based on advanced analysis,this paper provides some recommendations.First,increasing investment on education,improving utilization efficiency of education funding.Second,adjusting income gap through tax policies,through a scientific and reasonable tax,reducing inter-generational transfer of economic power and economic ability..Third,promoting the development of labor market standardization.Fourth,widening the channel of the in-service education.