Returns to Schooling in Urban China, 2001-2010: Evidence from Three Waves of the China Urban Labor Survey

This study provides estimates of the returns to schooling in urban China for migrants and non-migrants using three waves of the China Urban Labor Survey (CULS), corresponding to 2001, 2005 and 2010. We find that the returns to schooling increased about 2-3 per cent between 2001 and 2010. The two-stage least squares (TSLS) estimates, using spouse’s education as an instrumental variable, are slightly higher than the ordinary least squares (OLS) estimates, although TSLS estimates using an internal instrument constructed from the heteroskedasticity in the data are similar to the OLS estimates. We find that returns to schooling are higher for non-migrants than migrants and higher for males than females over the decade.