Analysis Of Internal Difference And Influencing Factors Of Rate Of Return To Education In China

Individuals improve human capital endowment by receiving education,thereby improving labor productivity to earn the corresponding income.At the macro level,residents can increase their income and the economy can be developed.However,China's labor market is still in the immature stage.Gender discrimination,regional economic development differences,household registration system,corporate ownership and other factors lead to that returns to education varies among different group of people,which is not conducive to narrowing the income gap.The results would be hindering social harmony,social stability and sustainable development.Accordingly,it is necessary to analyze the level of returns to education and the source of income inequality under the conditions of non-economic individual characteristics.Based on the theories of human capital and labor economics and the characteristics of labor market in China,this paper studies the difference of returns to education and income difference on four dimensions:gender,region,household registration and unit ownership.Firstly,the Mincer expansion equation is used to establish the econometric model,and the mean value of the rate of return to education is estimated,as well as the conditional distribution of the rate of return to education,to determine that the above four factors do cause internal differences in the rate of return on education.Secondly,the sub-sample is estimated by quantile regression to describe the distribution of the rate of return to education in the income quantile,on which we can explore the impact of these factors on the internal differences of the rate of return to education and dig into the causes of the difference.Then,test the robustness of the model basing to ensure the credibility of the estimation results.Finally,based on the econometric model,the paper use Melly2006 method to decompose the income difference of different groups and explore the source of the difference,which not only can support the reasons of the internal difference of education return rate,but also provide the solution for narrowing the income gap.The study comes to the following conclusions.Firstly,the rate of return to education of different genders decreases with the increase of the income quantile,and the rate of female is higher than that of male.The degree of discrimination against female is more than 60%,or even more than 90%at low quantile,and the degree is reversed with the income level,as well as the level of education.Secondly,the rate of return to education of central-western region decreases with the increase of the income quantile,and that of eastern region is the U-shaped distribution after the decline.As a result,the rate of people working in eastern region is higher than that of people working in central-western region at high quantile,and vice versa.About 80%of the income gap between the two regions can't be explained by personal endowment,indicating that there is a significant difference in the employment structure of the labor market.Thirdly,the rate of return to education of different types of household registration decreases with the increase of the income quantile,and the rate of people with agricultural account is higher than that of people with non-agricultural account.The degree of discrimination against agricultural group is below 40%,and the main reason for their lower income than non-agricultural group is that their human resource endowments are weaker.Fourthly,the rate of return to education of different types of unit ownership decreases with the increase of the income quantile,and the rate of people working in public sector is higher than that of people working in private sector.In contrast to private sector employees,public sector ones receive wage premiums.Additionally,their income reflects an average allocation pattern.According to the conclusions above,the paper put forward the following suggestions.Firstly,eliminate gender discrimination in the labor market,to achieve people-oriented social harmony.Secondly,improve the quality and quantity of education in urban and rural areas,to avoid the polarization of the initial allocation of income.Thirdly,optimize the regional industrial structure,to trigger a benign mechanism of economic development.Fourthly,break system barriers,to promote labor market integration.