Introduction
Economic return to schooling for china
There is extensive literature on economic returns to schooling in China. Estimates of the returns to schooling are important because of their effect on wages, income distribution, and incentives to invest in human capital
While most existing studies for China have used ordinary least squares (OLS) to estimate the earnings function, the problem with using OLS is that education is endogenous. Relatively few studies of the returns to schooling in China have used instrumental variables to address the endogeneity of education (see Chen & Hamori, 2009; Fleisher et al., 2005; Heckman &
Li, 2004; Li & Luo, 2004; Zhang, Liu, & Yung, 2007)
Necessary but not sufficient
Completing additional years of education has a range of positive outcomes. Income may be higher, employment easier to obtain and health better (Card 2001; Wolfe and
Havemann 2001; Borland 2002).
There are a number of individual factors that influence the return to a given level of education, including cognitive ability (Tobias 2003; Heckman, Stixrud, and Urzua
2006), discrimination in the labour market (Hunter 2004) and unobserved costs to education. Individuals would move to areas where the remuneration for their level of education was highest and students would move to areas with the lowest cost of education. However, there are social and economic costs to migration (Greenwood 1997; Yankow 2003), and hence, local resource endowments are likely to have some effect on the returns to education through the relative demand for skilled and non-skilled workers in the area.
Social return to college educ : south korea
Since the pioneering work of Schultz (1961) in human capital, much economic literature studies the importance of education on socioeconomic variables such as economic growth and personal income. It is now widely accepted that education is the biggest contributor in accumulating human capital, which plays an important role in increasing not only personal income but also a country’s gross output.
The importance of education has been commonly used to explain the ‘East Asian Economic Miracle’.
Especially, in the case of South Korea, most economists and policymakers consider that the highly educated and skilled Korean labour force is the main reason for its economic success. According to
Organisation for Economic Co-operation and
Development (OECD), 55.5% of the total population between 25 and 34 years have at least tertiary education, which is the second highest among all OECD member countries.1 the rate of return of investment in tertiary educ hungary
The profitability of education, which means the returns of education as a human capital investment can be examined from the individual’s, the society’s and the state’s point of view. The private rates of returns show how profitable for an individual to finish another level of education and social (and fiscal) rates of returns give the answer how profitable it is for the social (state) to spend money on education, on different levels of education and educational programmes (Varga, 1998).
There has been a significantly increase in the number of students of higher education in Hungary in the nineties.
The increase started in the beginning of the nineties, when compared to the previous year; the increase shows 10 percent yearly until 2000.
Data and Methodology
Basic mincer equation:
Thirty years ago, Jacob Mincer published his landmark book Schooling, Experience, and Earnings
(Jacob Mincer, 1974) that had a profound and lasting influence on empirical work in the field of labor economics.1 On the basis of both theoretical and empirical arguments carefully reviewed in this volume’s chapters by Barry Chiswick and Solomon Polachek, Mincer modeled the natural logarithm of earnings as a function of years of education and years of potential labor market experience (age minus year of schooling minus six). In the most widely used version of Mincer’s
"human capital earnings function", log earnings are modelled as the sum of a linear function of years of education and a quadratic function of years of potential experience:2
(1) log y = log y0 + rS + _1X + _2X2 , where y is earnings (y0 is the level of earnings of an individual with no education and no experience),
S is years of schooling, and X is years of potential labor market experience. Equation (1) has become the "workhorse" of empirical research on earnings determination.
How useful is standard mincer?
The Mincer equation, which relates the logarithm of hourly earnings to years of schooling, years of work experience and years of work experience squared, is one of the most commonly estimated relationships in labor economics. In many studies, economists have also used this equation as the baseline when they have examined other earnings determinants such as working conditions, union membership and sector of employment. When such an approach is used, one can say — as Sherwin
Rosen (1992) did in his article in the Journal of Economic
Perspectives that celebrated the work of Jacob
Mincer — that the data were Mincered.

Model
Key variables