A new GLO Discussion Paper finds that vocational education in China provides a wage premium vis-à-vis academic education of over 30%, but this holds only for individuals at the middle of the conditional wage distribution.

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GLO Discussion Paper No. 495, 2020

Does vocational education pay off in China? Instrumental-variable quantile-regression evidence – Download PDF
by Dai, Li & Martins, Pedro S.

GLO Fellow Pedro S. Martins

Abstract: As China’s firms upgrade their position in the quality ladder, vocational education may become more important. In this paper, we study returns to secondary vocational education in China paying attention to individual heterogeneity. We use instrumental variables based on geographical and longitudinal changes in enrollment to address the selection between the two types of education. We find that vocational education provides a wage premium vis-à-vis academic education of over 30% but which applies only for individuals at the middle of the conditional wage distribution.

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