Dynamics of returns to vocational education in China: 2010–2017

This paper analyzes the dynamics of returns to different education qualifications in China (2010–2017) using the Chinese General Social Survey data. It finds increasing returns for all education types, with vocational and academic education increasing at similar rates. Compared to compulsory education completion, upper secondary graduates earn ~20% more, vocational college graduates ~50% more, and university graduates ~75% more. At the tertiary level, academic education yields higher returns than vocational education, although the difference diminishes over time. At the upper secondary level, the evidence is inconclusive depending on the econometric technique used (OLS, IV, Lewbel method, or PSM). These findings contribute to limited quantitative evidence on vocational education returns and highlight labor market mismatch and overeducation in China, with significant policy implications.

Jie Chen, Francesco Pastore