RT Journal Article
SR Electronic
T1 Labor Market Experience and Returns to College Education in Fast Growing Economies
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0421-11629R2
DO 10.3368/jhr.0421-11629R2
A1 Li, Hongbin
A1 Liang, James
A1 Wu, Binzhen
YR 2022
UL http://jhr.uwpress.org/content/early/2022/06/01/jhr.0421-11629R2.abstract
AB China’s college admission increased by five times between 1998 and 2009. While the college premium for young workers declined, that for senior workers increased in this period. In our general equilibrium model, a rising demand for skills (education and experience) explains both trends. A demand shock leads to an expansion in the elastic college enrollment, depressing the college premium for young workers. With an inelastic supply, experienced college graduates continue to enjoy a rising premium. Despite the low immediate premium, young individuals continue to flood into colleges because they foresee high lifetime returns. Simulations match empirical results well.