Changes over time in the return to education in urban China: Conventional and ORU estimates

Studies of the return to education in urban China have reported that this has increased over time, and that females typically have a higher return than males. In this paper we adopt a framework provided by the over education/required education/under education literature, and the decomposition developed by Chiswick and Miller (2008), to investigate the reasons for these findings. The finding by Chen and Hamori (2009), from analysis of data for 2004 and 2006, of the return to schooling for males exceeding that for females, is also examined using this decomposition.

► We examine changes in the return to education in urban China from 1993 to 2006. ► The analyses are based on the over and under education framework. ► Education-occupation mismatch was not of any major consequence in 1993. ► Education-occupation matching was much more important in 2006. ► Non-productivity related aspects of earnings determination have decreased over time.