What Makes You Rich and Others Poor: How Many Spelling Contests You Win, How Many Wrinkles You Have, or What the President Has in Mind for Your Breakfast Table? The Relationship between Income Inequality and Returns to Education in Urban China, 1988-2002 Open Access

Ho, Jacqueline (2013)

Permanent URL: https://etd.library.emory.edu/concern/etds/k930bx74m?locale=en


In this paper, I hope to explore the relationship between income inequality and returns to education in urban China during the period of 1988 to 2002. From existing research, I understand that income inequality increased during the sample period, and difference in education experience is one of the major contributing factors for this observed increase. Using data from the China Household Income Project, I develop regression models to see the effect of different education levels of various age and gender groups on total personal income. With both horizontal and vertical comparisons of stratified groups within the same survey year and across survey years, I find that returns to education increase at a decreasing rate across age groups in all three survey years; the percentage increase in income for a college education and a high school education compared to low education increases for both genders across time; a special group whose education was interrupted by the Cultural Revolution demonstrates interesting pattern in terms of the change in total personal income as a result of differences in education level. Given these findings, there should be more carefully designed policies to assist those who face inequality in opportunities for education. Furthermore, it is necessary to consider what rippling effects are there caused by the education gap of this special group mentioned above.

Table of Contents

Table of Contents

1. Introduction
2. Background
(1) China's economic transition and growth
(2) Changes in Education (3) Urban income inequality in China
3. Data and Methodology
(1) Data
(2) Methodology
4. Results
(1) What happened to income inequality? (2) Any general trends in education returns in the period of 1988 to 2002?
a. Some ratios b. General trends for age groups
c. Gender groups
(3) Who are so special and why so special? 5. Conclusion
Tables, Figures, and Graphs

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