Study On The Difference Between Urban And Rural Rate Of Return On Education In China

In the process of transition from factor driven growth to innovation driven growth in China,the importance of human capital investment is becoming increasingly prominent.As an important form of human capital investment,education investment has become the focus of academic attention.The return of education investment is measured by the rate of return on education.It is the percentage of raised income via education by one year or one stage.And it is of great significance to study the rate of return on education.By researching the rate of return on education,we can judge the rationality of educational resource allocation,optimize the educational structure and guide human capital investors to make more rational educational investment.This thesis uses theoretical analysis and empirical analysis.First of all,from the perspective of human capital theory,this paper expounds the role of education in improving individual labor productivity and income.Then we summarize three main estimation methods of educational return,and analyze the direct and indirect factors affecting the rate of return on education.Among them,the direct factors include the types of employment,unit ownership factors,occupation factors and industry factors.The indirect factors include marital status,political affiliation,gender,residence types,family background and social institutional factors etc.Then,using statistical datum from CGSS in 2015,we estimate the overall rate of return on education,urban rate of return on education and rural rate of return on education.In order to research the structural differences between urban and rural areas,we divide the stage of education and estimate the rate of return on education of each stage respectively.To research the income distribution difference of the rate of return on education,we make a further study by using the quarntile regression model.The main conclusions of the thesis are as follows:1.There is a general difference between urban and rural rate of return on education in China.And there are structural differences in different education stages.2.Using the whole sample,the overall rate of return on education is 6.9%.Then we divide the urban sample and rural sample,the estimated rate of return on education in rural is 4.3%and urban average rate of return on education is 6.7%.They are all lower than the overall rate of return on education.At the same time,after controlling the influencing factors such as types of employment,occupation,sex and region,the difference of urban and rural rate of return on education decreases,which indicates that these factors play a certain role in the rate of return on education in urban and rural.3.As for the structural differences between urban and rural areas,we divide the education into junior high school and below stages,high school/vocational/technical school stage,college and above stages.In rural areas,the rate of return on education in junior high school and below stages is 7.1%,the rate of return on education in high school stages is 6.2%.In urban areas,the rate of return on education in junior high school and below stages is 3.6%,the rate of return on education in high school stages is 3%,and the rate of return on education in junior college and above stages is 11%.We find that accepting a higher level of education,we can easily improve the level of income.4.Lastly,we make a further study by quantile regression models.It shows that average rate of return on education does not increase or decreasing monotonically with income quantiles.The results are almost the same as OLS regression results,and thereis no serious heterogeneity problem in the model.Finally,on the basis of the empirical results of the thesis,we put forward the corresponding policy implications.