Earnings returns to tertiary education in urban China, 1988-2008*

Employing eight data sets from national surveys conducted between 1988 and 2008, I examine earnings returns over time to tertiary education relative to upper secondary education in urban China. A trend of an increasing college premium is found. However, this trend reversed after the mid-2000s, when the cohort of college graduates who were affected by the dramatic expansion of higher education after 1999 entered the labor market. The increasing share of employment in the market sector contributes to the increasing college premium, while the relative oversupply of graduates from tertiary education lower earnings returns to university or above education.