meng, xin (1995): The role of education in wage determination in China's rural industrial sector. Published in: Education Economics , Vol. 3, No. 3 (1995): pp. 235-247.
Download (99Kb) | Preview
The TVP labour market has undergone a great change during the economic reform period. Starting from a fully controlled recruitment system, more employees obtained employment through a more market oriented mechanism. This study applies human capital theory to investigate the impact of this institutional change on TVP wage determination. It is found that education as one of most important human capital variables plays an important role on the wage determination of those who obtained jobs through own effort (the market group), while it is insignificant for those who were assigned to the jobs (the non-market group). The further analysis suggests that although education plays different role on the market and non-market groups wage determination they are both productivity orientated. And the reason for this might be that the underlying technological processes of the work undertaken by the market group is higher than that for the non-market group. Does education, therefore, plays no role for the non-market group? The paper employs a logit model to prove that education is an important determinant for both the market and the non-market groups' occupational attainment. This suggests the following general picture: for the market group, there is a direct relationship between education, occupation and wage determination; for the non-market group this relationship is somewhat indirect. The rate of return to education is more likely to be reflected by non-wage benefit.
|Item Type:||MPRA Paper|
|Institution:||Economics, Research School of Pacific and Asian Studies, Australian National University|
|Original Title:||The role of education in wage determination in China's rural industrial sector|
|Keywords:||Return to education; China; Rural industrial sector|
|Subjects:||I - Health, Education, and Welfare > I2 - Education and Research Insititutions > I20 - General
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
|Depositing User:||xin meng|
|Date Deposited:||06. Jan 2007|
|Last Modified:||18. Feb 2013 02:51|
Brown, R. S., Moon, M., and Zoloth, B. S., 1980, "Incorporating Occupational Attainment in Studies of Male-Female Earnings Differentials" The Journal of Human Resources, 15(1), pp.3-28 Frank, B. H., 1984, "Are Workers Paid Their Marginal Products?", American Economic Review, (September) pp. 549-571. Gelb, A., 1990, "TVP Workers' Incomes, Incentives, and Attitudes" William A. Byrd and Lin Qingsong (eds) China's Rural Industry, pp.280-289, Oxford: Oxford University Press. Greene, W. H., 1990, Econometric Analysis, New York: Macmillan Publishing Company. McFadden, D., 1974, "The Measurement of Urban Travel Demand" Journal of Public Economics, (3), pp. 303-328. Meng, X., 1991, "Can Individual Wages in Chinese Rural Enterprises be Explained by Human Capital Theory?", Perth: Australian Ph. D. Conference in Economics and Business, 1991. Wolpin, K. I., 1977, "Education and Screening", American Economic Review, (December) pp.949-958.