Access to Elite Education, Wage Premium and Social Mobility: The Truth and Illusion of China's College Entrance Exam

Ruixue Jia, Assistant Professor of Economics, UC San Diego
| CSCC conference room, Fisher-Bennett 345

This study examines the returns to elite education and the implications of elite education on 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 elite education increases the monthly wage by around 40%. While elite education eligibility does significantly affect mobility, it does not alter the influence of parental background. We also provide suggestive evidence that the wage premium is more likely to be explained by university-related networks and signaling than that of human capital.