Return To Education And Their Sources Of China’s Urban

The rate of return to education level has become an important perspective which economic scholars study of Chinese labor market mechanism and income distribution.There is a widespread statistically positive correlation between individual education level and income,the various empirical data analysis have been significant verification in the world scope also,so many scholars for how to explain the relationship between education and income have made many theoretical research and empirical analysis.Human capital theory think that education produce individual incomes which comes from improve individual productivity. Signal screening theory emphasize that education produce individual incomes which comes from education improve the signal which representative of the individual labor productivity.In these theory background,how is the situation of the education improving laborer’s production function and signal function in China?Is the function of education has both the production function and the signal function?If education has these two function,how to its pattern in different populations and which is the mian function? Those are the main issues that need to be discussed in this paper.In the recent years,academic to the rate of return to Chinese education reaearch which focuses on the human capital theory perspective based on the education returns different change trend and the estimatation method of improvement.Very little involves the productive composition and signal component of education analysis.Even with relevant research,was also based on the data of earlier time point which test the production function and signal function about Chinese education.No research from the dynamic process analysis education of these two kinds of function patterm and trend in Chinese labor market.And there are significant limitations in these methods.In this paper,with the geographical distribution characteristics based on the Chinese urban household survey differene times data1992,2002and2008in Beijing, Liaoning, Zhejiang, Guangdong, Shaanxi and Sichuan using OLS estimates and Quintile Regression estimation methods, and control of education relativelocation, gender, industry, occupation and ownership that may affect wage income factors to estimate the rate of return of the six provinces and new method to observe the impact of education on the individual income of China’s urban and limitations of existing research methods. The study results show that:The level of education of the individual income of Chinese urban rise; The impact of education on individual income productive returns and signal return of two paths; Individual education of the low level of human capital is no significant impact on their income, a high level of human capital individual signal returns and the production returns that are higher than other individuals of the level of human capital; Education in the two paths of individual income, the production features predominate.Finally,combination of the conclusions of this study and the labor market situation, this paper gives policy recommendations:(1) continuing to focus on the positive effect of education on income, education at all levels of development in different regions;(2) focus on the transparency of the signal of the strategy of investment in human capital and education;(3) efforts to eliminate barriers to the movement of labor, improving the labor market mechanisms;(4) the development of new industries, improve the core competitiveness of industries.