Haizheng Li


Member Of:
  • School of Economics
  • Development Studies Program
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Office Location:
Old CE Building, Room 218
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Haizheng Li received his Ph.D. in Economics from the University of Colorado-Boulder. He joined the Georgia Tech faculty in the School of Economics in 1997, was promoted to Associate Professor in 2004, and to Professor in 2010. A specialist in applied econometrics, labor economics, and the Chinese economy, he has authored numerous journal articles, book chapters, and technical reports. His research focuses on human capital related issues, from human capital measurement, accumulation to its labor market effects. He has received two research grants from the Sloan Foundation Center for Paper Business and Industry Studies, and numerous grants from China. He has served as a consultant for the World Bank, special research fellow for various Chinese government agencies, is Chair of the Expert Supervising Board for Large Data Projects at the China National Natural Science Foundation, is a member of the Advisory Board of China Economic Review and was the President of the Chinese Economists Society (2006-07). At Georgia Tech, he served as Academic Senate and General Faculty Assembly Representative, Co-Director of the Georgia Tech-Shanghai Summer Program (2005-07), and Director of Information Technology and Chair of Review, Promotion and Tenure Committee at the School of Economics. His teaching includes econometrics, economic forecasting, labor economics, and microeconomics.

  • Ph.D., University of Colorado - Boulder
  • M.A., University of Colorado - Boulder
  • M.A., Renmin University of China
  • B.E., Huazhong University of Science & Technology
Awards and
  • 2013 - Chinese Economists Society Leadership Award
  • 2011 - Ivan Allen College Faculty Legacy Award
  • 2008 - Chinese Economists Society Leadership Award for President
Research Fields:
  • Applied Econometrics
  • Chinese Economy
  • Economic Development
  • Labor Economics
  • Asia (East)
  • Europe
  • United States
  • Regional Development
  • Education
  • Human Capital
  • Innovation
Courses Taught:
  • ECON-4160: Economic Forecasting
  • ECON-4232: Labor Economics
  • ECON-6160: Econometric Analysis
  • ECON-7023: Econometrics II

Selected Publications

Journal Articles

  • Firm-level human capital and innovation: Evidence from China
    In: China Economic Review [Peer Reviewed]
    Date: 2020

    Understanding the factors that may produce a sustained rate of innovation is important for promoting economic development and growth. In this paper, we examine the role of human capital in firms’ innovation by using a large sample of manufacturing firms from China. We use two firm-level datasets from China: one from metropolitan cities, and one from provincial small and medium sized cities. Patent applications are used as the measure of innovation. Human capital indicators used include skilled human capital (number of highly educated workers), general manager’s education and tenure, and management team’s education and age. We find that skilled human capital has a significant positive effect on firms’ innovation, while the management team’s age has a significant negative effect on innovation. The General Manager’s tenure plays a significant positive role in firm innovation in metropolitan cities, while it is the General Manager’s education that has a positive and significant effect on firms’ innovation in small and middle cities. We also find that the effect of R&D on patents is insignificant for firms in large cities, but it is positive and significant in the smaller and medium sized cities. We conclude by noting some policy issues for promoting innovation in developing economies.

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  • Human capital and leadership: the impact of cognitive and noncognitive abilities
    In: Applied Economics [Peer Reviewed]
    Date: 2019

    We conduct an economic analysis about the impact of human capital on an individual’s potential of becoming a leader based on data from the Programme for the International Assessment of Adult Competencies Survey (PIAAC). Our human capital indicators include not only traditional measures such as education and experience, but also various measures of cognitive and noncognitive ability. Our cognitive ability measures include numeracy, literacy, and problem solving abilities, and noncognitive ability measures include perseverance, motivation to learn, and social trust. We specifically investigate the effect of measurement error and reverse causality on the estimation results. We find that problem-solving ability is the most important in affecting leadership among cognitive ability measures, and perseverance shows the strongest impact among noncognitive ability measures. As a leader supervises more employees, the role of cognitive and noncognitive ability becomes more critical.

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  • Regional Distribution and Dynamics of Human Capital in China 1985-2014
    In: Journal of Comparative Economics [Peer Reviewed]
    Date: 2019

    This study investigates the regional distribution and dynamics of human capital in China. We develop a new comprehensive human capital measure based on the Jorgenson-Fraumeni (J-F) lifetime income framework, in addition to using the traditional education-based human capital measures. We find that the new J-F human capital measure reflects more closely the regional economic disparity than the education-based measures. We also conduct a Divisia decomposition analysis to investigate the contributions of different factors to the quantity and quality growth of human capital and to regional disparity. Our results show that the regional human capital gaps in China are enlarging in general. Education and urbanization contribute most to human capital growth, while population aging shows a strong negative effect. Our estimates create a new provincial level human capital panel dataset from 1985 to 2014, which is useful for empirical work and policy analysis.et i

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  • Demand for MOOC-An Application of Big Data
    In: China Economic Review [Peer Reviewed]
    Date: October 2018

    We evaluate factors affecting the demand for MOOC by estimating its demand function in OECD countries and in China. We apply a Big Data approach to construct a proxy for MOOC demand using Google Trends for OECD and Baidu Index for China. Based on estimation results of various panel data models, we find that in both cases, higher unemployment promotes MOOC demand. However, in OECD countries, the proportion of individuals with high school level or higher education have positive and significant effects on MOOC demand, while in China, we observe positive and significant effects from internet speed and average income.

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  • Pricing Strategies in Online Bool Industry: A Comparative Study
    In: Information Systems and e-Business Management [Peer Reviewed]
    Date: 2018

    In this paper, we examine pricing strategies in the U.S. online book industry over two time periods, with an aim to understand whether and how the driving factors of price dispersion change over time. Our empirical results show that dispersion in prices has remained substantial over the period of 2001–2006, but the driving factors of these variations in price have evolved. In 2001 online book retailers generally engaged in obfuscation, frustrating consumer search by manipulating shipping options. As documented by prior literature and revealed in our 2001 data, higher prices charged by retailers were positively related with longer shipping time. This strategy has been abandoned, as shown by our results of a 2006 sample. Online retailers are now competing to ship items quicker than rivals and to pass fewer or no shipping costs on to consumers. The impact of trust assurance seals (e.g., seals of online security and privacy) on price has materialized over the period of 2001–2006. This is because as more consumers become security conscious, the effects of assurance seals on the price becomes better recognized. Moreover, although retailers are roughly clustered into three cohorts, they strategize prices across different product items within each cohort.

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  • Identifying Human Capital Externality: Evidence from China
    In: Journal of Management Science and Engineering [Peer Reviewed]
    Date: December 2016

    Using data from two well-known individual surveys in China, we estimate human capital externality. We find a positive and statistically significant effect of city-level human capital on individual earnings. Fixed-effects estimates show a one-year increase in city average education could increase individual earnings between 7.3% and 8.9%. Our IV estimate indicates a 7.6% increase. This finding confirms a long-held belief by economists that there are external benefits of education that are not captured by the individuals who invested in human capital. By extension our finding also offers a justification for an active role of the government in promoting education. We also find that the estimated effect of human capital externality is larger in coastal cities than in non-coastal cities and is larger in the non-state sector than in the state sector. We ascribe these heterogeneities to differences in institutional and technological environments across cities and sectors.

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

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  • Access to College and Heterogeneous Returns to Education in China
    Date: 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”.

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

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

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  • Human Capital in China, 1985-2008
    Date: 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.

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

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  • Economic Transition, Higher Education and Worker Productivity in China
    Date: 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.

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  • Human Capital, Economic Growth, and Regional Inequality in China
    Date: 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.

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

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  • Labor Supply in Urban China
    Date: 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.

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  • Economic Transition and Returns to Education in China
    Date: 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.

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