Heterogeneous returns from job training in urban China

Abstract

This study investigates the rates of return from job training in China and examines the heterogeneity of these returns. Through focusing on the context of transitional China, this study adds new evidence to the literature on the acquisition of and returns from job training. The results are based on the analysis of an urban sample from the Chinese General Social Survey (2006), and these results lead to two main conclusions. First, there are positive returns from job training in transitional China, and the gender difference in the returns from such training is not significant. However, the regressions within separate male and female samples show that job training endows female workers with a bigger earnings advantage (of 51.3%) compared to females without job training, whereas male workers who receive job training gain a smaller earnings advantage (of 43.6%) compared to other male workers. The consistency of results from both the ordinary least squares (OLS) regression and propensity score matching (PSM) confirms the causal effect of job training. Second, by analyzing the heterogeneity of job training returns, this study reveals that a negative selection hypothesis applies to female workers but not to male workers. That is, the higher the possibility that female workers can receive job training, the lower the earnings advantage they gain from such training. Although this study is limited to data from the General Social Survey, it provides a narrative explanation for the observed patterns. The findings suggest that given the different requirements of job training across industry types, the heterogeneity of returns from training can be partly attributed to occupational segregation by gender. Moreover, the results from the model for predicting the likelihood of receiving job training provide new evidence for the social product theory of human capital. These results confirm that the reception of job training is largely determined by the social characteristics of individuals.

Date of Award	2014
Original language	English
Awarding Institution	The Hong Kong University of Science and Technology