The Rate Of Return To Education

The relationship between education and income has always been the hot spot in the field of education and economic research, the increase part of personal income obtained because of the improvement of education level is used to reflect the personal education economic benefits. Education, especially tertiary education, has long been regarded as a kind of human capital investment behavior, its purpose is to get the corresponding returns, and the educated gained from education correspondingly while they spent time, energy and expenditure on education. The traditional idea that accepting a relatively good education will have a chance to get higher returns which includes the social benefits as well as personal benefits of education investment. Estimating the yields that comes from accepting education activity helps education participants and their families to make their own realistic higher school entrance choice. With the constant improvement of the socialist market economy system, the problem of fair income distribution is affected and restricted by many factors, wage income is most people’s main source of personal income, and wage income is closely related to the individual level of education, so it is beneficial exploring education yields to explain the allocation efficiency of talents and the labor market wage decision mechanism, also to further explain income gap problem. To explore the related factors that affect education yields, gender difference and phase difference on the rate of education yield, which can promote improvements on the return of the whole societies’ education investment, and provide important reference basis for the society and the government’s reasonable planning and effective financial support on the education investment.This article selects the individual sample from 2010 Chinese Family tracking from Peking University(China Family Panel Studies, CFPS) as data, the sample data covering 25 provinces, municipalities and autonomous regions in China, and has a wide coverage and high credibility. Choosing sample according to different level of educated on the proportion of total population, regional population accounts for the proportion of total population and sex ratio, this study try every effort to make sample source reasonable on area distribution, education composition and sex ratio. At the same time, choose wage income as the wage of sample, choose the level of education in accordance with the ordinary primary schools and ordinary junior high school, etc. in turn, the selection, to ensure the accuracy of final results. Eventually samples of 844 individuals were selected from more than 30000 copies of individual samples as the research object, on the basis of bright income equation education yield model is established for OLS estimates, estimate the average education yields under the bright income model, estimates for each stage of education yields. And join the control variables, to find the effects of family background on their children’s education yields; and that on the disparity between the sexes education yields estimates and analyzes the possible reasons of the differences.The article draws the following conclusion:First, average education yields is 13.38% without considering missing variable, the results are biased, the estimation is higher than real average education yields, after considering the important control variable: intelligence(IQ) and family background factors(father’s occupation, father’s education degree), this model’s endogenous had been overcome, the estimation results of this model is closer to the real value, the education yields is 11.89%, the problem of higher estimation results is improved.Second, education yields in different stages of education exists heterogeneity, different stages of education has different education yields, the longer you’ve been educated and the higher degree you’ve got, the higher the education yields will be correspondingly. Use ordinary primary school as control group, the education yields of junior high school is 3.26% on average(keep two decimal places), ordinary high school education yields is 14.06% on average, junior college education yields is 14.91% on average., there is no significant difference in education yields between ordinary primary school and ordinary junior high school stage, but there are significant differences among ordinary primary school, ordinary high school and junior college in education yields.Third, family background plays an important role in the decision on the level of education and income of respondents, to use fathers who has only enjoyed primary school education as the reference group, the respondents whose father has college bachelor degree, has a significantly higher education yields than whose father only has ordinary primary school or ordinary junior high school education; Father’s vocational differences also has significant influence on education yields, if fathers’ occupation is the head of state organs, organizations, enterprises, institutions, their children’s education yields is as high as 19.37%, significantly higher than respondents whose fathers’ career is in other industries. We can believe that under the same degree, good family background can make the individual education yields a higher estimation than reality.Fourth, education yield has significant gender differences, women education yield on average is about 3.18% higher than that of men. Comparing longitudinal average education yields of different stages, the women who received education after junior high school has obvious yields increase, and higher than that of male in the same stage. There is less discrimination of women with master or doctor degree in the labor market wage than college undergraduate, its education yields are higher than male with master or doctor degree. So this article verifies the education yields among gender differences, and which is higher among women than men, women receive higher level of education helps to improve the whole social education yield.