Returns to education and urban-migrant wage differentials in China: IV quantile treatment effects

This article presents new evidence on urban-rural migrant wage differentials of workers in full-time employment in China. It utilises a nationally representative data set, recent matching techniques, and IV estimation methods to evaluate conditional and unconditional quantile treatment effects for education and for migrant status. Particular attention is paid to rural-migrant wage differentials and the migration effect on earnings. The evidence indicates that (1) the returns to education are significant, especially when we account for endogeneity; (2) long-term migrants seem disadvantaged, mainly due to endowment effects, and (3) the urban-rural migrant wage gap completely disappears when matching or IV methods are employed to account for endogeneity in education.