Impact of Interupted Education on Earnings: The Educational Cost of the Chinese Cultural revolution

Impact of school interruptions on earnings through lower subsequent educational attainment and lower quality of education is investigated using the Chinese Cultural Revolution as a natural experiment. During the Cultural Revolution, most schools in China stopped normal operation for 3 to 4 years, universities stopped normal student recruitment for an even longer period. Such large scale school interruptions reduced the opportunity of the cohort to obtain university degrees. We find that individuals who did not obtain a university degree becasue of the Cultural revolution on average lost 46 per cent of their potential earnings. In addition most of the cohort experienced missed or interrupted schooling, at a given level of education and we show that this reduced earnings of degree holders of the Cultural Revolution cohort by 7.3 per cent on average. The findings in this paper also indicate that the quality of schooling affected earnings of individuals in a non-linear way, that is, only missed schooling at junior and senior high level reduced subsequent earnings and it only reduced earnings of those with degrees.