Three essays on the labor market in China

Abstract

This dissertation consists of three chapters studying the impact of different policies in China on its labor market. In particular, we consider the impact of the Cultural Revolution on intergenerational mobility, the impact of college expansion on earnings and unemployment, and the impact of college expansion on migration. In the first chapter, we study the impacts of the Cultural Revolution on intergenerational and multi-generational educational mobility in China. We use a difference-in-difference method to show that the Cultural Revolution (CR) significantly reduced the advantage of having a more-educated father on a child's educational attainment. The impact of the CR on intergenerational mobility is identified by an index that measures for each individual the number of school years during which the CR restricted education access. The decline of the effect of father's educational level on children's college degree attainment is mediated through the likelihood of obtaining a high school degree, participating in the college entrance examination, and obtaining higher exam scores for those who take the exam. However, the Cultural Revolution did not fully eliminate the advantage of having a more-educated father on a child's educational achievement, nor did it reduce the effect of grandfather's schooling on a grandchild's educational achievement. In the second chapter, we study the short-term response of the labor market to an unprecedented expansion in the Chinese higher education system from 1999 to 2012 on labor market outcomes for young and older college graduates and non-college graduates. Using the number of provincial college admissions as a measure of college expansion, we identify the impacts of the college expansion on the college premium, unemployment, and skills used in first jobs. In the short run, the college expansion decreased the college premium and increased the likelihood of unemployment for new college graduates. Also, the college expansion reduced the cognitive skills used in college graduates' first jobs. The negative impact of the college expansion on labor outcomes is smaller for older college graduates. Our results are consistent with findings published in the 1970s focusing on the effects of the U.S college expansion. In the third chapter, we study the impact of aggregate college admissions on inter-provincial migration in China for different age groups. Examining migration propensity, we find that the college expansion has a direct "enrollment effect" and a "competition effect" on the likelihood of inter-provincial migration. College-bound students are more likely to migrate at ages 17-20 as college admissions in outside provinces increase; and college graduates are more likely to migrate after graduation as the number of local new college graduates increases. In addition, we identify a negative impact of local college admissions on migration at ages 17-20, reflecting the improvement in local educational and labor market opportunities. We also use a conditional Logit model to consider the choice of migration destination and identify how inter-regional differences in college growth affect the patterns of migration. These three chapters provide multiple policy implications as well as evidence for labor economic theories and hypotheses as they relate to China's labor market.