Economic Returns to Schooling for China’s Korean Minority

This paper examines economic returns to schooling for China’s Korean minority in the urban labour market using ordinary least squares (OLS) and two-stage least squares. The OLS estimates of the returns to schooling are similar to findings from recent studies for the Chinese urban labour market. We use father’s education, mother’s education and spouse’s education to instrument for education. The two-stage least squares estimates are considerably higher than the OLS estimates for returns to schooling and slightly higher than existing two-stage least squares estimates of the returns to schooling for the Chinese urban labour market. The two stage least squares estimates of the returns to schooling for the Korean minority living in urban areas are high compared with the Asian average and world average. The economic returns to schooling reported in this study assists to explain why private demand for education among the Korean minority in China is strong and provides a justification for the Korean minority’s focus on educational attainment. 1 The data used in this study was collected as part of a joint project between Dalian Nationalities University, China and Monash University, Australia. We thank Ru Feng, Gang Song and Juyong Zhang for assistance with collecting the data and Wenshu Gao for locating some of the statistics cited in the paper. © 2010 Vinod Mishra and Russell Smyth All rights reserved. No part of this paper may be reproduced in any form, or stored in a retrieval system, without the prior written permission of the author.