Haizheng Li

Overview

Selected Publications

Journal Articles

• The Earnings Effects of Health and Health-Related Activities: A Panel Data Approach

  March 2015

  We investigate the effects of health and health-related habits on earnings in China using panel data to control for unobserved heterogeneity related to individual traits and job characteristics. Health-related habits include smoking cigarettes, drinking tea, frequency of drinking alcohol and physical exercising. We find a significant and large impact of health status on earnings, controlling for schooling, experience and the unobserved individual heterogeneity and job heterogeneity. We also find that smoking has a strong negative effect on earnings net of health status, while the estimated effects of other health-related activities are statistically insignificant.

• Access to College and Heterogeneous Returns to Education in China

  October 2014

  We apply a semi-parametric latent variable model to estimate selection and sorting effects on the evolution of private returns to schooling for college graduates during China's reform between 1988 and 2002. We find that there were substantial sorting gains under the traditional system, but such gains have dissipated to negligible levels in the most recent data. We take this as evidence of growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies has declined. The main policy implication of our results is that labor and education reform without concomitant capital market reform and government support for the financially disadvantaged exacerbates increases in inequality inherent in elimination of the traditional “wage-grid”.

• Human Capital Estimates in China: New Panel Data 1985-2010

  September 2014

  We introduce new provincial level panel data on human capital in China from 1985 to 2010. Our estimation of human capital is based on the Jorgenson–Fraumeni lifetime income approach modified to fit the Chinese data, thereby allowing a more comprehensive measurement of human capital than traditional partial measurements, such as education. Our provincial data are adjusted for purchasing power parity via a living-cost index as well as for real values so that all values are comparable across the provinces and time. We discuss various characteristics of the data, including total human capital, per capita human capital, and labor force human capital, which in turn are disaggregated based on gender and urban or rural location. Our human capital estimates are compared with the provincial physical capital estimates and provincial GDP. As an illustration, we also use the data to estimate a production function and to decompose China's economic growth from physical capital, human capital, and TFP. Our results, compared with those that use traditional specifications, reassure us as to the reliability of our new China human capital data.

• China's Human Capital Measurement: Method, Results, and Application

  May 2014

  In this study, we briefly introduce the methodology based on Jorgenson-Fraumeni lifetime income approach to measure China’s human capital, and describe the results of human capital estimation at the national level and provincial level from 1985 to 2010. We discussed the distribution and dynamics of total human capital, total labor force human capital, and related average human capital by rural and urban, and by male and female, at the provincial level. New research based on our new human capital estimates are introduced.

  **This journal article is published in Chinese.

  笔者系统描述了适合国情的中国人力资本综合度量的方法体系, 介绍了相应的计算结果及其在相关人力资本研究领域中的具体应用。通过建立中国第一套人力资本综合度量指标体系及相应面板数据库,本研究为定量分析中国人力 资本的分布及其发展状况、深入研究人力资本对中国经济及社会发展的作用、为政府在经济社会方面的重大决策等提供定量依据。而基于中国人力资本面板数据的其 他研究进一步表明人力资本综合度量体系的理论价值和现实意义。同时,笔者根据计算所得的1985—2010年间国家和省级层面的多种跨时间、跨省份可比的 年度人力资本数据,分别讨论了中国总体人力资本、人均人力资本以及劳动力人力资本等的分布状况和发展动态。研究结果表明,从国家层面看,近年来中国人力资 本显著增长并呈加快趋势,教育等因素逐渐成为人力资本增长的动力,但也表现出城乡间人力资本的差距扩大以及人口老龄化对人力资本发展的不利影响;从省级层 面看,人力资本省际差异明显,经济发达省份的发展状况明显好于经济发展相对落后的省份。 

• Human Capital in China, 1985-2008

  June 2013

  We estimated China's human capital stock from 1985 to 2008 based on the Jorgenson–Fraumeni (J–F) lifetime income framework. In order to accommodate the Chinese data and to capture human capital accumulation through both formal education and informal training, we modified the original J–F method by incorporating the Mincer model. We calculated total and per capita human capital stock for different population groups, and studied their trends and dynamics during the course of economic transition. We also constructed Divisia indexes of various orders to evaluate the contribution of different factors to the growth of human capital in China.

• Social Networks and Study Abroad - The Case of Chinese Visiting Students in the US

  September 2012

  Using a unique data set on Chinese visiting students in the US, we investigate some non-traditional determinants, especially social networks/connections, on the number of Chinese students hosted in American universities. Applying truncated, OLS, and GLS estimation, we find that social networks/connections have a strong positive and significant effect, and the result is robust across model specifications and estimation methods.

• Economic Transition, Higher Education and Worker Productivity in China

  January 2011

  We investigate the role of education on worker productivity and firms' total factor productivity using a panel of firm-level data from China. We estimate the returns to education by calculating the marginal productivity of workers of different education levels based on estimates of the firm-level production function. We also estimate how the education level of workers and CEO contributes to firms' total factor productivity. Estimated marginal products are much higher than wages, and the gap is larger for highly educated workers. Our estimate shows that an additional year of schooling raises marginal product by 30.1%, and that CEO's education increases TFP for foreign-invested firms. Estimates vary substantially across ownership classes, the effect of schooling on productivity being highest in foreign-invested firms. We infer that market mechanisms contribute to a more efficient use of human capital within firms.

• Human Capital, Economic Growth, and Regional Inequality in China

  July 2010

  We show how regional growth patterns in China depend on regional differences in physical, human, and infrastructure capital as well as on differences in foreign direct investment (FDI) flows. We also evaluate the impact of market reforms, especially the reforms that followed Deng Xiaoping's “South Trip” in 1992 those that resulted from serious hardening of budget constraints of state enterprises around 1997. We find that FDI had a much larger effect on TFP growth before 1994 than after, and we attribute this to the encouragement of and increasing success of private and quasi-private enterprises. We find that human capital positively affects output and productivity growth in our cross-provincial study. Moreover, we find both direct and indirect effects of human capital on TFP growth. These impacts of education are more consistent than those found in cross-national studies. The direct effect is hypothesized to come from domestic innovation activities, while the indirect impact is a spillover effect of human capital on TFP growth. We conduct cost-benefit analysis of hypothetical investments in human capital and infrastructure. We find that, while investment in infrastructure generates higher returns in the developed, eastern regions than in the interior, investing in human capital generates slightly higher or comparable returns in the interior regions. We conclude that human capital investment in less-developed areas is justified on efficiency grounds and because it contributes to a reduction in regional inequality.

• Economic Transition and Product Demand Pattern in China: Evidence from China's Paper and Paperboard Industry

  September 2006

  In this study, we investigate the demand pattern and structural changes during the economic transformation using data from the paper and paperboard industry in China. Instrumental variable estimations as well as co-integration analysis and error correction models are applied to the analysis. Our results show that in the early stages of economic reform before 1993, the demand did not respond to price changes; while in the later stages, the demand shows significant responses to its own-price and the price of international markets. In particular, since 1992, the own and cross-price elasticity of demand for domestically made paper and paperboard products becomes, respectively, − 0.69 and 0.59, in the range found in some market economies. We also find that imports are substitutes for domestically made paper and paperboard products, but the reverse is not true; and in the later stage of economic transition, the reliance on international market has increased, as reflected by the lower price elasticity of imports.

• Labor Supply in Urban China

  December 2003

  Using labor supply responses from 10,560 urban Chinese workers, two-stage least squares estimations identify positive compensated wage effects and negative income effects that are, for the most part, statistically significant. The gross wage effects are mostly positive but they indicate relatively low uncompensated labor supply elasticities. The compensated wage effects are much larger; these may be important in assessing the labor market consequences of reform policies that monetize non-pecuniary benefits. The significance of labor supply responses depends on individual responsibilities within the family; the effects are largest for women and non-household heads.

• Economic Transition and Returns to Education in China

  June 2003

  This study uses the most recent household survey data from 1995 to estimate returns to education in urban China. Most existing studies in the literature are based on data from the 1980s and find that the rates of return to education in China are remarkably low. This study investigates whether the returns have been underestimated and whether such returns have increased as economic reforms deepen in China. The estimates of returns in this study are considerably higher than previous estimates. Two factors explain the findings: first, previous works using annual earnings instead of hourly wages bias the estimates downward; second, returns to education have increased as the transition process has deepened in China. In addition, average annual returns above the elementary school level are considerably higher than the overall returns. Finally, the private sector rewards highly educated individuals the most, while the state-owned sector rewards low education levels the most, and the returns to education are higher in less-developed, low-income provinces.

Chapters

• Human Capital: Schooling

  December 2014