Research On The Benefit And Risk Of Chinese Urban Citizens’ Education Investment

As the most important part of human capital investment, education promotes social progress and economic development. When education is taken as a kind of investment behavior, it has two basic attributes which are profits and risks. The study on the benefits and risks of education investment and their distribution and formation mechanism is of great signification. For a long time, researchers pay more attention to the rate of return to education (RRE), but the researches on empirical analysis of education risks are poor. This study comprehensively analyzes the benefits and risks of private education investment, which has important practical significance for family making rational education investment.This paper is supported by human capital theory. On the basics of reviewing related literature about the benefits and risks of education investment, this paper mainly estimates the Mincer RRE and risks of education investment using CHIP data of 1995, 2002 and 2008. And this paper takes use of OLS and Quintile Regression (QR) to estimate the Mincer RRE and risks of education investment. Besides, this paper analyzes the difference of Mincer RRE and risks of education investment in gender, industry, unit types and regional differences.The results show that the level of RRS for urban areas in China generally maintained an upward trend in 1995,2002 and 2008, but the increasing trend grows slowed. The risks of education investment are on the decline with economic development and marketization. And the paper further compares the RRS and risks of education investment among different genders, regions, industries, and the unit types. The results show that the level of RRS of male is higher than female in urban areas, and the gap shows an increasing trend. The risks of education investment of male and female show a decreasing trend. In terms of industry, the tertiary industry with high value, the primary industry and the monopoly secondary industry have a higher level of RRS. The risks of education of the monopoly secondary industry are the lowest in 2002, and the risks of education of the tertiary industry with low value are the lowest in 2008. In terms of unit type, with the greatest risks of education, the level of RRS of the foreign enterprises is the highest. In the aspect of region, the level of RRS of eastern is the highest, when the level of RRS of the central region is the lowest. The risks of education in eastern, central and western region appear a decreasing trend.Finally, based on the results of empirical analysis, the paper proposes a series of rationalization policy recommendations from the perspective of the education investor, government and university.