Genetic Analysis On The Differences Of The Rates Of Return To Education In China

Education is a fundamental factor of a nation’s prosperity, no doubt about itsimportance. The rate of return to education, as an estimate reflecting the efficiency ofeducation, has always attracted much attention. From the70s in the20th century whenthe theory of human capital developed mature, estimating the rate of return to educationhas become an essential tool for scholars of different countries who research oneducation-related issues. Chinese scholars have also begun using national data ofeducation to yield estimate, and they have achieved fruitful results ever since.The most basic and the most commonly used method for the estimates of the rateof return to education was called Mincer method, which was used in this paper. Ofcourse, due to the factors considered by the basic Mincer earnings equation are too few,some renovation was made.In the process of estimation, we first consider the average rate of return toeducation, through which an overall understanding of the situation of education yields.Followed by packet yield of workers with different levels of education, it is animportant indicator to measure the income gap between workers. In addition, in theview that higher education is an important position in the education system, the paperfocuses on the changes of the yield of higher education. Since then, this paper analyzesthe causes of differences on the rate of return to education, focused on the followingfour factors: the nature of the working areas, the rural-urban division, laborers’ genderand the ownership of work. Then, the paper gets conclusions as follows:(1)Although our rate of return to education in general is not very high, but with thecontinuous progress of China’s market-oriented reforms, the yield is still slowlyimproving.(2) The gap between the yields of different levels of education is growing, whichhas now been one of factors expanding the income gap.(3) Because of the higher enrollment rates at the end of last century, the rate ofhigher education yields a downward trend.(4) This paper analyzes the factors that lead to differences in rate of return toeducation and puts forward policy recommendations.