Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/72210 
Year of Publication: 
2012
Series/Report no.: 
UCD Centre for Economic Research Working Paper Series No. WP12/20
Publisher: 
University College Dublin, UCD School of Economics, Dublin
Abstract: 
Good understanding on the human capital externalities is important for both policy makers and social science researchers. Economists have speculated for at least a century that the social returns to education may exceed the private returns. In this paper, using the longitudinal data from China Health and Nutrition Survey (CHNS), we examine how individual wage changes associated with the share of college graduates in the same province across years for a person who has never moved by implementing individual fixed effects estimates. The individual fixed effect model shows that the external returns to education in China appear to be negative and on the order of -2%, which might be biased by potential endogeneity. Concerned with this problem, we then implement the IV fixed effect estimates and find positive external returns to education at about 10%. We also find this returns differ across individual heterogeneity.
Subjects: 
Education
Externalities
Spillover
Signalling
China
JEL: 
J0
J24
O15
Document Type: 
Working Paper

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