Can Graduating from a Key University Really Increase People’s Market Returns? Evidence from China’s Urban Formal Labor Market (1993-2010)

As the continuous increasing of the total number of workers with the undergraduate degree, it is not going to university but going to what kind of university becomes increasingly important on affecting the returns of labor market. Using the adult data from the China Family Panel Studies in 2010 and based on the OLS regression model, this paper analyzes the market returns variation of workers graduated from universities of “project 211” and non-“project 211”. The result shows that the market returns of workers who graduated from “project 211” universities are significantly higher than those of workers who graduated from non-“project 211” universities. Although the estimation coefficient based on the propensity score matching method is slightly less than the partial regression coefficient of OLS regression results, the result is still significant. Therefore, the result once again supports the human capital theory, and rejects the screening theory.