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Dissertation Proposal The Impact of College Quality on Early Labor Market Outcomes in China Li Yu Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy under the Executive Committee of the Graduate School of Arts and Sciences COLUMBIA UNIVERSITY 2014 UMI Number: 3621616 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI 3621616 Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, MI 48106 - 1346 © 2014 Li Yu All rights reserved ABSTRACT The Impact of College Quality on Early Labor Market Outcomes in China Li Yu This study aims to explore the impact of college quality on early labor market outcomes in China, including the fresh college graduates’ initial employment status and starting wages for students who graduated in 2011. The main data source is the College Student Labor Market (CSLM) survey conducted by Tsinghua University. Distinguished from previous Chinese studies that merely utilized the broad and abstract college quality categories to measure college quality in China, input-based school resource indicators, including faculty-student ratio, proportion of faculty members holding doctoral degrees, average freshman National College Entrance Examination (NCEE) score, and teaching expenditure per student are collected to measure college quality in China for the first time. To identify the causal effect of college quality, the instrumental variable approach and the propensity score matching method are employed to account for the endogeneity of elite college attendance in addition to the traditional ordinary least squares (OLS) regression. To explore the heterogeneous effect of college quality varying by student and family background characteristics, a series of interaction terms are generated in the OLS regressions. The quantile regressions are employed to explore the effect of college quality varying by earning distribution. Moreover, the Heckman correction approach is used to test for potential sample selection bias. This study finds solid evidence that elite college attendance generally has a positive and statistically significant effect on the initial employment status and starting salaries for fresh college graduates who intend to work after college graduation. I find weak support for the existence of heterogeneous effect of college quality. Less-capable students tend to benefit more from attending elite colleges. However, the impact of college quality does not seem to vary by graduates’ earning distribution. When using the input-based college quality measures, the results suggest that the quality gap does exist between elite and non-elite colleges in China and the major finding that there is a positive impact of college quality on the starting salary still holds. Some input indicators have stronger correlations with college graduates’ starting wages than others. Table of Contents LIST OF TABLES .................................................................................................................... iv LIST OF FIGURES ................................................................................................................. vii LIST OF ACRONYMS .......................................................................................................... viii ACKNOWLEDGEMENTS ...................................................................................................... xi Chapter 1 Introduction ............................................................................................................... 1 1.1 Context and Motivation ............................................................................................... 1 1.2 Statement of Problem ................................................................................................... 4 1.3 Key Research Questions .............................................................................................. 5 1.4 Overview of Higher Education in China ..................................................................... 6 1.5 Structure of Dissertation ............................................................................................ 11 1.6 Definition of Key Terms ............................................................................................ 11 Chapter 2 Literature Review .................................................................................................... 15 2.1 Theory ........................................................................................................................ 15 2.2 Empirical Evidence of the Effect of College Quality in the United States ................ 17 2.3 Empirical Evidence on Labor Market Returns to College Quality in China ............. 25 2.4 Methodology Review ................................................................................................. 34 2.5 Summary and Discussion ........................................................................................... 38 Chapter 3 Research Questions and Methodology .................................................................... 40 3.1 Introduction ................................................................................................................ 40 3.2 Key Research Questions ............................................................................................ 40 3.3 Conceptual Framework .............................................................................................. 42 3.4 Analytical Approach................................................................................................... 45 i 3.5 Measuring College Quality ........................................................................................ 46 3.6 Research Methodology .............................................................................................. 50 3.6.1 The Baseline OLS/Probit Model ..................................................................... 50 3.6.2 Instrumental Variables Estimation .................................................................. 55 3.6.3 Propensity Score Matching ............................................................................. 56 3.6.4 The Quantile Regression ................................................................................. 58 3.6.5 The Heckman Selection Correction ................................................................ 59 3.7 Data Collection and Data Processing ......................................................................... 61 3.7.1 Data Collection and Questionnaire Design ..................................................... 61 3.7.2 Sampling Strategy ........................................................................................... 62 3.7.3 Sampling Weight ............................................................................................. 64 3.7.4 Sample Selection and Missing Data ............................................................... 64 3.7.5 Index Construction .......................................................................................... 71 Chapter 4 Descriptive Statistics ............................................................................................... 77 4.1 Descriptive Statistics and Correlation ........................................................................ 77 4.1.1 Descriptive Statistics ....................................................................................... 77 4.1.2 Correlation ...................................................................................................... 84 4.2 Employment Status and Starting Salary ..................................................................... 93 4.3 College Quality .......................................................................................................... 96 Chapter 5 Empirical Results .................................................................................................... 99 5.1 The Effect of College Quality on Initial Employment Status .................................. 100 5.1.1 The Baseline Probit Model ........................................................................... 100 5.1.2 Instrumental Variable Estimation .................................................................. 107 ii 5.2 The Effect of College Quality on Starting Wage ..................................................... 110 5.2.1 The Baseline OLS Model .............................................................................. 110 5.2.2 Instrumental Variable Estimation .................................................................. 118 5.2.3 Heckman Sample Selection Correction ........................................................ 126 5.2.4 Propensity Score Matching ........................................................................... 130 5.2.4 Summary of Findings .................................................................................... 139 5.3 The Heterogeneous Effect of College Quality Varying by Student Characteristics 141 5.4 The Varying Effect of College Quality by Earning Distribution ............................
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