Return to Education for China's Return Migrant Entrepreneurs

This paper examines the return to education for entrepreneurs in rural China with a large return migrant survey dataset. By exploiting the unique culture of male dominance in Chinese society, we use women's education to instrument their husbands' schooling. The results show that the return to one additional year of schooling ranges between 12.6% and 18.8% for China's return migrant entrepreneurs, much larger than the estimated returns to education for off-farm wage workers documented in the literature. We also find that the return to education for entrepreneurs who hire paid workers more than doubles that for own-account workers.