“Access to Elite Education, Wage Premium, and Social Mobility: The Truth and Illusion of China’s College Entrance Exam” by Professor Hongbin Li
Professor Hongbin Li
Visiting Professor Stanford Center for International Development
Stanford Institute for Economic Policy Research
This paper studies the returns to elite education and the implications of elite education on elite formation and social mobility, exploiting an open elite education recruitment system – China's College Entrance Exam. We conduct annual national surveys of around 40,000 college graduates during 2010-2015 to collect their scores at the college entrance exam, job outcomes, and other individual and family characteristics. Exploiting a discontinuity in elite university eligibility around the cutoff scores, we find a sizable wage premium of elite education but elite education eligibility does not necessarily promise one's entry into the elite class (measured by occupation, industry and other non -wage benefits). While elite education eligibility does significantly affect one's mobility, it does not alter the influence of one's parental background. We also find that the wage premium is more consistent with the role of universityrelated networks and signaling than that of human capital.