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NBERWORKINGPAPERSERIES
UNDERSTANDINGTRENDSINCHINESESKILLPREMIUMS,2007-2018
EricA.Hanushek
YuanWang
LeiZhang
WorkingPaper31367
/papers/w31367
NATIONALBUREAUOFECONOMICRESEARCH
1050MassachusettsAvenue
Cambridge,MA02138
June2023
LeiZhangacknowledgesfinancialsupportfromtheNationalNaturalScienceFoundationofChina(grantnumber71973095).GangXieprovidesvaluableresearchassistance.TheviewsexpressedhereinarethoseoftheauthorsanddonotnecessarilyreflecttheviewsoftheNationalBureauofEconomicResearch.
NBERworkingpapersarecirculatedfordiscussionandcommentpurposes.Theyhavenotbeenpeer-reviewedorbeensubjecttothereviewbytheNBERBoardofDirectorsthataccompaniesofficialNBERpublications.
©2023byEricA.Hanushek,YuanWang,andLeiZhang.Allrightsreserved.Shortsectionsoftext,nottoexceedtwoparagraphs,maybequotedwithoutexplicitpermissionprovidedthatfullcredit,including©notice,isgiventothesource.
UnderstandingTrendsinChineseSkillPremiums,2007-2018
EricA.Hanushek,YuanWang,andLeiZhang
NBERWorkingPaperNo.31367
June2023
JELNo.I26,J01,O10
ABSTRACT
ThedramaticexpansionoftheeducationsystemandthetransformationoftheeconomyinChinaprovideanopportunitytoinvestigatehowthelabormarketrewardsskills.Between2007and2018,theoverallreturntocognitiveskillsisvirtuallyconstantat10%,whereasthecollegepremiumdropssteeplybymorethan20percentagepoints.But,theregionaldifferencesinreturnsaresignificantandhighlighttheimportanceofdifferentialdemandfactors.Collegereturnsarehigherinmoredevelopedregions,butthedecliningtrendismorepronounced.Returnstocognitiveskillsincreaseinmoredevelopedregionsanddecreaseinlessdevelopedregions.
EricA.Hanushek
LeiZhang
HooverInstitution
AntaiCollegeofEconomicsandManagement
StanfordUniversity
ShanghaiJiaoTongUniversity
Stanford,CA94305-6010
1954HuashanRoad
andNBER
Shanghai,200030
hanushek@
P.R.China
zlei89@
YuanWang
NationalSchoolofDevelopment
PekingUniversity
Beijing100871
China
ywang_econ@
2
1.Introduction
Thesimplesteconomicmodelsuggeststhatrapidlyexpandingeducationalattainmentwouldforcerelativewagesofcollegeworkersdownastheybecomemoreplentiful.Butthisceterisparibusstatementmustobviouslybebalancedbychangesindemand.UnderstandingthisbalancehasbeenthesubjectofavarietyofinvestigationsintheUnitedStates,buttherathersmoothtransitionsofbotheducationandtechnologyhavemadereconciliationoftheseinfluencesdifficult.
1
Incontrast,thedramaticpolicy-drivenchangesincollegeavailabilityandinindustrialstructurein21stcenturyChinaofferaclearerviewofhowthesupplyanddemandfactorsplayoutinthelabormarket.Importantly,thefullinterplaycanstillbeobscuredbytheregionalcomplexityofChineselabormarkets.
Chinaexperiencedfastgrowthinbothsupplyofanddemandforskillsoverthepasttwodecades.Theexpansionofthehighereducationsectorledtoasharpincreaseincollegegraduatesandhencethesupplyofskilledlaborsincetheearly2000s.But,theeconomyalsoexperiencedunprecedentedgrowth,particularlyamongthehigh-skilledsectors.Theoveralleffectonthelabormarketreturnstoskillshasyettobefullyanalyzed,inpartbecauseofvariousmeasurementissues.
Inspiteofthecentralimportanceofskillsinsuchaninvestigation,measuresofskillshavenotbeenreadilyavailable.Whileschoolattainmentiswidelyavailableinsurveydata,skillmeasuresarenot.Usingschoolattainmenttogaugereturnstoskillscan,however,bequitemisleadingineconomiesexperiencinglarge-scaleschoolexpansions.Expansionmaybeaccompaniedbyconcurrentchangesintheabilitydistributionofstudentsacrosseducationgroupsandintheresourcesallocatedtodifferenteducationalsectors.Therefore,amoredirectmeasureofskillsisessential.
InthispaperweconstructalongitudinaldatabasethatallowsustoestimatethetimepathofreturnstobothcognitiveskillsandeducationalattainmentincontemporaryChina.Weusetwocomplementarydatasets.TheChineseHouseholdIncomeProject(CHIP)for2007,2013,and2018containdataoncollegeentranceexam(Gaokao)scoresforhigh-schoolandcollegegraduates.Withthesedata,weestimatetrendsinthereturnstoacollegedegreeandtocognitive
1IntheU.S.,theearlysuggestionoffallingrelativewagesofmoreeducatedworkers(Freeman1976)wasreconciledwiththesubsequentriseincollegewagesbynotionsofskill-biasedtechnologychange(GoldinandKatz2007).
3
skillsoveraperiodofmorethanadecadeduringwhichtheChineseeconomyexperiencedtremendoustransformations,bothinoveralleconomicgrowthandinthestructureoftheeconomy.TheChinaFamilyPanelStudies(CFPS)for2014providesmeasuresofbasiccognitiveskillsforindividualsofalleducationlevelsthatallowustocomparelabormarketreturnstoskillsinChinawiththoseinothercountries.
Onanationwidebasis,estimatesofthereturntocognitiveskillscontrollingforcollegedegreeremainquitestableat10%forfull-timeworkerswithatleastahighschooldegreefrom2007to2018.But,overthesametimeperiod,thecollegepremiumrelativetohighschoolgraduationdeclinessharplybyover20percentagepoints.ForallthreewavesoftheCHIPdata,thereturntocognitiveskillsisweaklyhigherforfemaleandyoungerworkers,whilethereturntoacollegedegreeissignificantlyhigherforolderworkers.Foralldemographicgroups,thedeclineinthereturntoacollegedegreefrom2007tolateryearsissalient.
Turningtoregionaldata,however,bringstheoverallpictureintosharperfocus.Continuedincreasesinthesupplyofcollege-educatedworkerscombinedwiththegrowthofthehigh-skilledsectorintheeconomyandhenceincreasesinthedemandforhigh-skilledworkerscanexplainthetrendinthereturnstoacollegedegreeandcognitiveskills.Thecollegepremiumdeclinesfrom2007to2018inbothmoreandlessdevelopedregions,butonlyinthemostdevelopedregion(Beijing,Shanghai,Zhejiang,Guangdong)isthedeclinemonotonic.Thisislikelyduetodisproportionateincreasesinthesupplyofcollege-educatedworkersinthisregionthatoffsettheupwardpressureonwagesfromtheincreasesinthedemandformoreeducatedworkersfollowingthegrowthofthehigh-skilledsector.
Thetrendinskillpremiumestimatedonnationaldatamasksastrongregionaldisparity.Thereturntocognitiveskillsincreasesfrom2007tolateryearsinthemoredevelopedregion,butweaklydecreasesinthelessdevelopedregion,consistentwiththegrowthpatternofthehigh-skilledsectorandthecorrespondingdemandforskillsinthetworegions.
Wecanalsodirectlycomparethesereturnstowhatisobservedmorebroadlyindevelopedcountries.ThereturntocognitiveskillsweestimatefromtheCHIPsurveyof2013andCFPSsurveyof2014arebothcomparabletoestimatesfromsurveysdatacollectedbetween2011and2012foralargenumberofOECDcountries.Inallthreecases,thereturntocognitiveskillsisaround20percentwithoutcontrollingforschoolinganddropstoabout10percentonceschoolingiscontrolledfor;thisholdsforboththesampleofindividualsofalleducationlevels
4
(CFPS2014intheChinesecase)andthatofindividualswithatleastahighschooleducation.
2
Thiscomparabilityacrossdifferentdatasetsforaparticulartimeperiodisreassuring,andthecomparabilitytoestimatesforOECDcountriesalsoshedslightontheprogressionofthemarket-orientedreformsoftheChineselabormarketingeneral.
2.RelatedResearch
Thispaperisrelatedandcontributesprimarilytotwostrandsoftheliterature.
2.1Trendsinreturnstoschooling
Thedynamicpatternofreturnstoskillshasreceivedmuchresearchattentionasitreflectsimportantaspectsofchangesinthelabormarket.Thebulkoftheliteratureonthissubjectusesyearsofschoolingoreducationdegreesasmeasuresofskills(KatzandMurphy1992;Zhang,Zhao,Park,Song2005;GoldinandKatz2007tonamejustafew).Yetyearsofschoolingonlycapturesapartofthedeterminantsofcognitiveskills,andothersourcesofskillformationhavebeenleftoutincludingindividualability,familyinput,andschoolqualityitself.Focusingonlyonthequantityofschoolingcanbeparticularlytroublesomeinadynamiccontextduetothevaryingqualityofeducationaswellasthechangingskilldistributionwithineacheducational
group.
Someresearchrecognizesandattemptstodealwiththismeasurementissueviadecompositionanalyses.Decompositionanalysesexplainthevarianceinearningswithchangesinthedistributionofobservedskills,suchaseducationandexperience,andtheirprices,andwiththeresidualvarianceincludingchangesinthedistributionofunobservedskillsandtheirprices.Essentially,skillsformedthroughchannelsotherthanschoolingareincludedintheunobservedcomponent.Theunobservedcomponentofskillsisfoundtobecrucialinexplainingearningsinequality,bothwithineducationgroups(Juhn,Murphy,andPierce1993;Meng,Shen,Xue2013)andbetweeneducationgroups(CarneiroandLee2011).Forinstance,CarneiroandLee(2011)findthatcollegepremiumintheUnitedStatesovertheperiodof1960-2000wouldbe6percentagepointshigher(comparedtoanincreaseof40percentagepoints)ifdecreasesinthequalityofcollegegraduatesaretakenintoaccount.
Theconsensusofthesestudiesisthatweneedvariationsinboththesupplyanddemandsidestoexplaintheobservedtrendinreturnstoobservedskills(schooling)andunobserved
2GuidoSchwerdtkindlyprovideduswithestimatesforthesampleofindividualswithatleastahighschooleducationforOECDcountriesusingthePIAACdata.
5
skills.Asurgeinthesupplymayputadirectdownwardpressureonthereturntoacollegedegree,butthegradualriseindemandhelpmaintainorevenincreasethepriceofunobservedskills.Therefore,thecollegepremiumandthereturntocognitiveskillsmaynotmoveinparallel,andcomparingtheirmovementswillprovideabetterunderstandingofchangesinthelabormarket.
Nevertheless,investigatingreturnstounobservedskillsstillposesachallengeinthesestudiessinceitisdifficulttodisentanglethepriceandthedistributionofunobservedskillsintheresidualcomponent.Ourstrategyistoisolatesomecomponentsfromtheunobservedskillswithadirectmeasureofcognitiveskills.Weuserepeatedcross-sectionaldatathatcontaininformationonbotheducationattainmentandcognitiveskillmeasuresforhighschoolandcollegegraduates.Thisprovidesaveryrareopportunitytostudythetrendinreturnstoskills.
2.2Returnstocognitiveskills
Studiesonreturnstocognitiveskillsusuallyusecross-sectionaldataforaparticularpointoftimeandfocusonOECDcountriesduetodataavailability(Hanushek,Schwerdt,Wiederhold,andWoessmann2015;LindqvistandRonie2011).HanushekandWoessmann(2008)reviewearlystudiesforafewdevelopingcountries,butevidenceondevelopingeconomiescontinuestobescarce.AfewrecentstudiesestimatereturnstocognitiveskillsinChina,buttheyeitherusecoarsemeasuresofskillsordatawithlimitedpopulationcoverage.Knight,Deng,andLi(2017)drawontheurbansampleofCHIP2002and2007anduseself-reportedquintilesofhighschoolperformanceinbothwavesandGaokaoscore(unadjusted)in2007tomeasurequalityofeducation,essentially,actualskillsofindividuals.Theyfindpositiveandsignificantreturnstobothmeasures.Glewwe,Huang,andPark(2017)uselongitudinalsurveydataofruralchildreninGansuProvince,oneofChina’sleastdevelopedprovinces,andfindnosignificantexplanatorypowerofchildhoodcognitiveskillsforwagesattheveryearlystageofthelabormarketonceyearsofschoolingiscontrolledfor.Usinganewwaveofdatafromthesamesurvey,however,Glewwe,Song,andZou(2022)findapositivereturntocognitiveskillsforadultsintheirlate20sevenafterconditioningonyearsofschooling.Employerlearningandfrictionsinjobsearchareproposedaspossibleexplanationsforthediscrepancybetweenthesetwostudies,butthelimitedsamplesizedoesnotallowforaformaltestofthesehypotheses.
ThispaperemploysrecentdataforrepresentativesamplesoftheChinesepopulationworkinginthewagedsector,whichallowsustoestimatethereturntocognitiveskillsinChinaat
6
large.Thesamplesizeissufficientlylargetoallowustoexploretheheterogeneityinthereturnfromvariousperspectives.Additionally,ourdatacoverthetimeperiodcomparabletostudiesofOECDcountries(Hanusheketal.2015,2017),whichmayserveasabenchmarkforourresults.JuxtaposingtheseresultsprovidesnewinsightsregardingthedevelopmentofChina’slabormarketincomparisontothatofthemoredevelopedcountries.
Whilethereisagrowingnumberofstudiesonthereturntocognitiveskills,researchontrendsinthisreturnsisstillrare.Murnane,Willett,andLevy(1995)studyreturnstocognitiveskillsfortwocohortsofU.S.highschoolgraduatesbyage24andfindgreaterimportanceofskillsinthe1980sthanthe1970s,whereskillsaremeasuredbytestscoresonelementarymathematicalconceptsconductedinthehighschoolsenioryear.UsingNLSY1979and1997data,CastexandDechter(2014)findthatreturnstocognitiveskillsmeasuredbytheAFQTscoredeclineby30%-50%between1980sand2000sforthe18-28yearolds,whichtheyattributetodifferencesinthegrowthrateoftechnologybetweenthetwoperiods.BothpapersfocusonworkersintheearlystageoftheircareersintheUS.Edin,Fredriksson,Nybom,andӦckert(2022)documentthatthereturntonon-cognitiveskillsroughlydoubleswhilethereturntocognitiveskillsremainsrelativelystablebetween1992and2013forSwedishmaleworkersaged38-42.Thispaperaddstotheliteraturebydocumentingtrendsintheskillpremiuminoneofthelargestdevelopingeconomiesoveraten-yearperiodandforworkersinawiderangeofcareerstages.
3.ChangingChineseLabormarket
ThelabormarketinChinahasundergonesubstantialchangesenteringthenewmillennium.Inthissection,wedescribemajorchangesinthesupplyanddemandsidesthatarelikelytohavelastingimpactsonthereturnstoacollegedegreeandtocognitiveskills.
3
Themostimportantdevelopmentonthesupplysideisthehighereducationexpansionstartedin1999.Nationwide,collegeadmissionsincreasedbyover40percentinboth1999and2000,andcontinuedtogrowatmorethan10percentperyearthrough2005.
4
Becausethevastmajorityofcollegestudentsfinishtheirstudyontime,thenumberofcollegegraduatesgrowsdramatically,fromonemillionin2000to8.1millionin2018(Figure1).Thegrowthrateof
3Majorreformsthattransformedthelabormarketfromoneofcentrally-plannedtooneofmarket-orientedoccurredinthe1990s,andtheinstitutionalchangesvirtuallycompletedbytheearly2000s.See,forexample,Mengetal.(2013)andGeetal.(2021).
4SeeCheandZhang(2018)foramoredetaileddescriptionofthereformofthehighereducationsystem.
7
collegecompletionisthehighestin2003(40.2percent),whenthefirstcohortofstudentsadmittedtocollegeundertheexpansionregimegraduated,anditstabilizedataround3percentinrecentyears.Overall,thesupplyofcollege-educatedandskilledworkershasgrowncontinuouslyinthepastdecade.
Themostprominentchangesonthedemandsidearetheslowdownoftheeconomicgrowthandthetransitionoftheeconomicstructure,inparticular,postofthe2008globaleconomicrecession.AscanbeseenfromFigure2,whilepercapitaGDPhasgrownsteadilyandmorethanquadrupledoverthepasttwodecades,
5
theannualgrowthrateplungedin2008fromanall-timehighofcloseto14percentinlargepartduetotherecession.Itrecoveredmoderatelyby2010thankstothequickimplementationoftheFour-TrillionYuanstimuluspackage,buttheannualgrowthratestartedadownwardtrendafterwardsandstayedatslightlyabove6percentinrecent
years.
Therecessionandtheensuingslowdownoftheeconomicgrowthpromptedthecentralgovernmenttointensifytheefforttopushthetransitionoftheeconomicgrowthfromrelyingonheavyusageofnaturalresourcesandrawlabortobeingdrivenbyinnovationandadoptionoffrontier,moreskill-biasedtechnologies.In2008andsubsequentyearstheStateCouncilissuedaseriesofguidingopinionsregardingtheupgradeoftheindustrialstructureandmeasurestopromotethetransitionsuchasprojectapproval,bankloans,andtaxsubsidies.
6
Particularlyemphasizedistheupgradeoftheproducerservicesectorsincludinglogistics,informationtechnology,financingandleasing,researchanddevelopment,businessconsulting,andsoforth.Theshiftintheeconomicstructureinthe2010sissalient.WhiletheshareofnationalGDPaccountedforbytheindustrialsectorwasaround46percentinthe2000s,itdeclinedsteeplyafter2011.Mirroringthesechanges,whilethesizeoftheservicesectorlaggedbehindtheindustrialsectorintheentire2000s,itstartedtogrowfasterafter2008andacceleratedfurtherin2012.By2019,theservicesectoraccountedforadominant54%ofthenationalGDP,comparedto39%bytheindustrialsector(Figure3).
5PercapitaGDPmeasuredinconstant2000Yuanis7,912Yuanand35,006Yuanin2000and2018respectively.
6ExamplesoftheStateCouncilpolicydocumentsincludeOpinionsoftheGeneralOfficeoftheStateCouncilonImplementationofSeveralPoliciesandMeasuresforAcceleratingtheDevelopmentoftheServiceIndustry(2008),GuidingOpinionsoftheGeneralOfficeoftheStateCouncilonFinancialSupporttoEconomicStructureAdjustment,TransformationandUpgrading(2013),GuidingOpinionsoftheStateCouncilonAcceleratingtheDevelopmentofProducerServicesandPromotingtheAdjustmentandUpgradingofIndustrialStructure(2014),MadeinChina2025
(2015).AlldocumentscanbeaccessedattheStateCouncilwebsite.
8
Theexpansionoftheservicesectoringeneraltendstoraisethedemandforskilledlabor,butclearlyindustrieswithintheservicesectorvarysubstantiallyinthehigh-skilledshare,rangingfrom8.2percentto69.8percent.Theservicesectorincludesbothindustriesintensiveintheemploymentofhigh-skilledworkerssuchasfinanceandinformationandcommunicationtechnology(ICT)andindustriesemployingprimarilylow-skilledlaborssuchaswholesaleandretailandfoodservices.Todrawamoreprecisepictureoftheindustrialstructureandrelativedemandforskilledworkers,wedirectlyclassifyindustriesbytheshareofhigh-skilledemployees,i.e.,thosewithatleasta3-yearcollegedegree.Table1reportstheshareofhigh-skilledworkersforeachindustryin2017.
7
Wedefinehigh-skilled(HS)sectorasindustrieswhosenationwideshareofhigh-skilledworkersisabove30%in2017,andlow-skilled(LS)sectorasindustriesemployinglessthan30%ofhigh-skilledworkersin2017.Figure4depictsthepercapitavalue-addedandshareinGDPoftheHSandLSsectors.
8
Between2000and2018,thepercapitavalue-addedoftheHSsectorexperienceafive-foldincrease,from1,808Yuanto9,392Yuanmeasuredinconstant2000Yuan,whereasthatoftheLSsectorgrowsmuchslower,from6,050Yuanto20,670Yuan.Withtheexceptionbetween2009and2011,thegrowthrateofpercapitavalue-addedoftheHSsectorisquitestableataround8percentannually,butthatoftheLSsectordeceleratesto5.8percentafter2013,from8.8percentpreviously.SimilartoFigure3,HSsector’svalue-addedshareinGDPincreasessubstantiallyfrom23%in2000to37%in2018,withacorrespondingdeclineoftheLSsector.
AsaresultofboththeincreaseincollegegraduatesandthestructuralchangesoftheChineseeconomy,theshareofemployedworkerswithatleasta3-yearcollegeeducationrisesfrom5.6percentin2001to19.1percentin2018(Figure5).Notethatthissharebegantoincreaserapidlyonlyafter2009,perhapsbecausealthoughthegrowthrateofcollegegraduatesishighatthestartoftheexpansion,thestockofcollege-educatedworkersinthelaborforceisstilltoosmalltosubstantiallychangethecompositionofthelaborforce.
9
7DatacomefromtheChinaPopulationandEmploymentStatisticsYearbook.
8SincetheNationalBureauofStatisticsofChinadoesnotseparatelyreportthevalue-addedofProductionandSupplyofElectricity,Heat,Gas,andWaterindustry(intheindustrialsector),itisincludedinthelow-skilledsector,eventhoughithas40.1%ofhigh-skilledemployees.Forthesamereason,ManagementofWaterConservancy,EnvironmentandPublicInfrastructureindustry(24.9%ofhigh-skilledemployees)andResidentialandHouseholdServicesindustry(12.2%ofhigh-skilledemployees,bothintheservicesector)areincludedinthehigh-skilledsector.
9China’smandatoryretirementageofformalsectoremployeesvarieswithoccupation;ingeneral,occupationsthattendtobefilledbyless-educatedworkers(forexample,physicallystrenuousoccupations)haveanearlierretirement
9
Chinaisalargecountryoftremendousregionalheterogeneity,manifestedalsointhedevelopmentoftheHSsector.Figure6illustratestheevolutionofthevalue-addedoftheHSsectorbyprovincefrom2007to2017(seeAppendixTableA1fortheexactvalues).
10
NotonlyhastheHSsectorexpandedovertimenationwide,buttheregionaldisparityhasalsogrownconsiderably.EasternregionshavealreadyshownadvantagesinthedevelopmentoftheHSsectorin2007,andtheadvantagehasenlargedovertime.Meanwhile,someprovincesinthewesternandcentralpartsofChina,includingSichuan,Hunan,Hubei,Henan,andHebei,alsocatchuprapidly.Nevertheless,themajorityofthewesternandcentralregionsexperiencesamuchslowertransitiontoaskill-intensiveeconomy.Forexample,thevalue-addedoftheHSsectorinJiangxiProvince(inthecentralregion)increasesfrom85billionYuanin2007to271billionYuanin2017;meanwhilethatofitsneighboringZhejiangProvince(onthecoast)hasgrownfrom363billionYuanto1,008billionYuan.Holdingtherelativelaborsupplyequal,skilledworkersinregionswithalargerHSsectorwilllikelyenjoyahigherskillpremiumduetoagreaterrelativedemandforskills.Atthesametime,regionswithahigherpriceforskillswilllikelyattractmoreskilledworkers,attenuatingtosomeextenttheskillpremium.Whichforcedominatesisintrinsicallyanempiricalquestion.
4.DataandEmpiricalFramework
Weemploytwocomplementarydatasetsfortheempiricalanalysis:TheChineseHouseholdIncomeProject(CHIP)dataandtheChinaFamilyPanelStudies(CFPS)data.Bothdataarehigh-quality,nationallyrepresentativeandhavebeenwidelyusedbyresearcherstostudyChina’ssocialandeconomicissues.
11
Theybothcontainrichinformationonindividualcharacteristicsincludingage,gender,educationalattainment,andfamilybackground,andcurrentlabormarketactivitiessuchasannualsalary,workinghours,industry,andoccupation.
Oneuniquefeatureofthesetwodatasetsthatisparticularlyvaluableforourstudyisthattheybothcontaincognitiveskillmeasuresforindividuals.TheCHIPdatacontainthecollegeentranceexam(Gaokao)scoresforhighschoolandcollegegraduatessincethe2007wave;they
age.AppendixFigureA1showsthattheshareofolderworkers(aged45-60)withacollegedegreeorabovehaveincreasedsteadilysince2007,partiallycontributingtothepatternobservedinFigure5.
10Wechoosethreetimepoints(2007,2013,and2017)tomatchtheyearsofdatafortheempiricalanalysis.Using2018wouldbepreferable,butdataonvalue-addedofHSsectorin2018isnotyetavailable.
11ExamplesthatuseCHIPdataincludeWeiandZhang(2011),Nakamura,Steinsson,andLiu(2016),andSunandZhang(2020);examplesthatuseCFPSdataareBaiandWu(2020),Ong,Yang,andZhang(2020),andFan,Yi,andZhang(2021).Zhou(2014)usesbothdatasets.
10
arerepeatedcross-sections,enablingustousethe2007,2013,and2018wavestoestimatethetrendsofreturnstoacollegedegreeandcognitiveskills.TheCFPSdataarelongitudinal,collectedinitiallyin2010andbienniallythereafter;itcontainsscoresonbasicliteracytests(mathandword)administeredtoallindividualsaged10andaboveregardlessoftheireducationlevel.Weusetheadultsampleofthe2014wave,whichallowsustocompareestimateswithboththosefromthe2013CHIPdataandthoseofrecentinternationalstudies(Hanusheketal.2015).
4.1CognitiveskillmeasuresinCHIP2007,2013,2018andCFPS2014
The2007,2013and2018wavesoftheCHIPsurveyelicitself-reportedinformationonindividuals’collegeentranceexam(Gaokao)scores.GaokaoisoneofthemostimportanteducationalinstitutionsinChina.Itisadministerednationwideintheearlysummereachyeartohighschoolgraduate
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