Rational Expectation and Education Rewarding: The Case of Chinese Off-Farm Wage Employment

This study establishes a life-cycle model that a representative agent chooses optimal time of education to maximize his/her life earning, which implies that there may exist nonlinear relation between education and earning. Using the data of Chinese off-farm wage employment, we find that the duration of schooling years will increase by 1.7 years with 1 percent increase in rate of return to education. The empirical results also indicate that controversies about return to education might arise from model misspecification without consideration of nonlinearity and sample selection.


Issue Date:
2011
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/114530
Total Pages:
12
JEL Codes:
I20; J43; Q01




 Record created 2017-04-01, last modified 2017-08-26

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