NARRATOR: The following is part of Cornell Contemporary China Initiative lecture series under the Cornell East Asia program. The arguments and viewpoints of this talk belong solely to the speaker. We hope you enjoy.
So, today we have Ruixue Jia, who's come to speak to us from San Diego, where she's been since 2013. But before that, she was in Stockholm, where she did her PhD in-- and I have to read this too because it's long-- in the Institute for International Economic studies at Stockholm University. And your department, now, in San Diego is the global
RUIXUE JIA: --policy and strategy.
SPEAKER: --policy and strategy. And GPS-- newly named. So, we're very happy to have her here, from all these disparate places, to speak to us about some very important things in China-- very interesting mix of economics and social issues, so I hand it to you.
RUIXUE JIA: Thanks a lot. So, this is based on mainly our joint work with Hongbin Li from Tainghua. So, you see his name there. Like before, talking about China on the exam, I want to share with you a broad motivation why we started thinking about this project. Access to education, especially elite education, is believed to be super important for elite formation of social mobility across all societies-- more modern societies.
You may note the sociology works by Pierre Bourdieu, for example. And I will not talk about that literature instead of talk more about economics. So, economics, there's also burgeoning literature trying to estimate the returns to elite education. For example, if you attend Cornell University, how much more would you earn after graduation compared to attending a non-elite or non-Ivy League university? Surprisingly enough, there's no conclusion on this, and many studies find, actually, you don't necessarily earn more.
Why there is controversy-- conversation about this topic? You would think it may be easier just to compare the graduate students here with another set of graduate students from a less good university. Let's look at their salaries, and then we get the conclusion. But that's nothing easy, as you see. You can come to Cornell because you are much able than other universities, or your family background might be very different than students from non-elite universities.
So, in the end, when you go to the [INAUDIBLE] market, even if you earn more, it's not necessarily because of Cornell, it could be because of your own ability or because of your family background. So, that's a typical challenge known as a selection, and that makes it difficult to reach a conclusion about whether attending an elite university really helps or not. And this literature also didn't talk much about elite formation or social mobility.
So, in this project, we try to first also estimate the returns to elite education, but you also want to speak to social mobility and the elite information in China. In addition, we want to shed some light to understand the mechanism. If you find out which premium, where does it come from? And why China?
Of course, one reason is the Chinese care about China, and many of you may care about China. That's why you are here. But even if you don't care about China, a Chinese case is very interesting to study intellectually, because this Chinese ideal laboratory to understand the role of elite education. As you may know, each year, around 10 million students are taking this college entrance exam.
This is likely to be the largest standardized exam in the world. And this exam score will determine whether a young person can attend a university and which tier of university. So, it's really important for this 10 million of students each year. And they exist cut offs for different tiers of university.
So, for the first tier, the elite university, if you are above the cutoff, you are eligible to apply-- if not, you are not eligible. When social scientists hear about this, they got excited. You seem not to be excited. Because why this is so exciting is because now you can compare relatively similar students. Before, I said, it's very difficult to compare student in Cornell with the non-Ivy League university students, but now you can compare relatively similar students. It's just, some are just a few points above the cutoff. Some are just a few points below the cutoff.
Now, let's look at which university they went to, and let's follow them, and see whether they are someone who-- whether there is difference in which-- when they go to the labor market. And in addition to this general motivation, the exam system may be one of the most important institutions in China as many of you may know. It's often perceived to be the most important channel for commoners to become elite in the society. I will focus on economic consequence in this talk, but this exam system also has other interesting social, cultural, political consequences.
If you are interested in the political consequence, you can read a great paper-- I was joking-- written by my coauthor and I last year. Look at a historical version of the exam and how that effects political stability of Chinese dynasties, but I wouldn't talk about this in this talk. I would talk about the modern college entrance exam and the economic consequences. Just to show you some picture, you can easily-- if you type the exam, called [CHINESE] in Chinese, in Google, you'll find many, many impressive pictures online.
The first pictures, I selected a few for you-- the first one is like how my classroom looked like when I was in high school. People are just heading down practice and the excises for the exam. They don't have time to ask questions. So, I always think that's one reason why Chinese students are not great at asking questions even when they come to the US, so I'm very happy on this side speaking instead of sitting there, thinking about, oh, what questions should I ask? So, don't worry if you do not have many questions later.
And the second picture is a-- not only the students are clearly working hard, their parents are in the US a lot. And when they were writing on the exam during the two days to improve, their parents are waiting equally anxiously outside. And my father was doing that when I was taking the exam. And the school has also came up with all types of interesting slogans trying to encourage their students to work hard.
And here is one popular one. It said oh, without the exam, how could you compete with the second generation-- with the rich? And this is because some students complained that university is so harsh to work for the exam, but the rationale is without it, how could you compete in this society? Because the children of the rich had so many advantages.
But why do we-- I could stop here and let you go. This is very important. The students work hard, and your parents are in US a lot. Then, of course, on the labor market, there shouldn't be some consequence, and we can stop, and you can go home. But this is not without controversy, because this University-- China, as you know, family background is also believed to be crucial in the labor market. And there even was a phrase-- ironic phrase called, to each according to his dad. You know, Marxism has this to each according to his need. Then this is ironically saying, oh, in the end, it's to each, the distribution of the societies according to your dad.
So if this is right, then this upward mobility provided by the exam might be just an illusion rather than reality, so that's why we want to collect systematic data and do a careful analysis to better understand the general pattern. And if you find something, we also want to understand the mechanism behind the pattern. So, I just gave you a preview about what we found so far. Then you can think about your Halloween party while I go through the details.
So, the first is that's scoring above the elite university cutoff makes one more likely to go to university. If you think China is super corrupt, maybe their education system is also very corrupt-- even though there are some cutoffs, it doesn't matter in the end. But the answer is, yes, it matters a lot. Scoring above the cutoff increased the probability a lot of going into an elite university.
And the second question is does elite education lead to a higher wage? The answer is yes. And in fact, it's sizable, as I'll show you. And then, if you earn a higher wage going into elite education, that mean that you've become elite in the society. Honestly, it's unclear. I'll be more concrete about this later.
So while we finally reach premium, we don't find much in other important dimensions that is important for being an elite in this society such as perks, such as whether you are working for the government or whether you can work for the banking industry sector. I'll be more clear later.
And most want to know that's going to-- in terms of intergenerational mobility, that's going to-- that's going to an elite university or scoring above the cutoff changes the intergenerational mobility. In other words, that changes how your parental status affects your own status And our answer is now, this might be surprising, but we find no change in intergenerational mobility. I'll be clear later about what we find.
Finally, we want to understand what leads to the wage premium, that you learn more in an elite university like Cornell, or you actually get to know more people so that you have a better job, that this is purely a signaling channel. You don't necessarily learn more, have more human capital than other students in a non-elite university, but you still get higher wage, because there is strong signalling. You have elite education. That's very important.
And what we find, surprising or not, is more evidence for signalling than human capital or social networks, and you know, you might have some question that we can discuss later on. So I will now come to the details. I will first briefly introduce some background over how the elite education works in China and tells you how we collect this data. And then I'll go to the questions and our answers step by step.
So, first, all tiers of Chinese university, all the universities in China, recruit based on the exam system, and what we call elite university in this project is the first tier, and they recruit first after the exam. There about 2,300 universities in China. Among them in our study period, only 96 count as the first tier across all provinces, and this definition is very closely related to this Project 211.
I'm not sure whether you heard about it, but this is designated 100 universities for the 21st century, but these are not the category of elite university. They are heavily overlapped with what we call elite university in this project. And just for your information, all elite universities in China are public, not like now, I guess.
And they are not so small. They are more like you'll see the University of California type of university. And they don't charge higher tuition fees than private universities. And the yearly tuition fee is about 5,000 RNB. So it's about $800, not too high, right? $800.
And what would make elite university special is they have more resources and the government support. And they attract very different students. And there's an interesting feature-- I'll come back to this after telling you all those findings. The education system in China is very well known for strict entries and the easy out.
So you had this very strict exam to select students, but once you are in, almost everyone are promised to graduate. So that might affect the mechanism of which premium you will find later. So if you go to an elite university or a non-elite university, the graduate ratio or rate is very similar.
So how would the-- how do universities admit students? So just to give you a rough picture, the foremost provinces, the process works as follows-- first, everyone takes the exam, and the exam was graded by province. So the score are only comparable within a province.
And after seeing the scores, the government would decide the cutoff for the elite university, and the cutoff would be public. Everyone knows this, and the students know their scores, and they know the cutoff. They fill in the application, including the university and the majors.
If you are above the cutoff, the first tier cutoff, you are eligible to apply for these elite universities. But this is not sufficient. For example, if you are 20 point above the cutoff, you apply to Tsinghua, which is the top elite university, you are very less likely to get into it, because many people apply to Tsinghua.
So there's a computation. In the end, what the minimum score for each universities is different, depending on the computation. So the cutoff determines the eligibility, but it's not sufficient just to be clear. And then after resuming these applications, the university decides whom to accept.
So just how the scores looked like-- so in this period, most provinces use a scale of 750 points. So they're based on four projects. There are two tracks. One is called a natural science track. The other is social science track. And they are testing different subjects.
I wouldn't read it, but roughly based on four subjects and together, the maximum score is 750 points. And I just want to be clear about the background. If you are below the cutoff, you have a very low probability, not zero, but low probability you can still apply, if you have some extra scores.
For example, these extra scores are typically because they are a minority. Or your father died for the country, or you get some international prize from math, physics type of computation. You have got some extra score. So even if your original score is below the cutoff, with the extra score, you can become eligible.
But the probability is generally very low. And if you are above the cutoff, yes, you can apply now. But as I said before, it's not that 100% sure you're getting to the university you apply. You could be rejected. I didn't get into any university.
This is the background, and I'll come to the data. I said, social scientists are very excited about this. They should have already found this-- why no one has done. This is because there are no data on this. Individuals do know their own score, but there is no systematic score available for a large group of individuals. Radio
If you get that, it's very difficult to link the scores to the labor market outcome. So to do this, one has to collect data oneself. So what we do is we have been collecting this data for six years while serving the graduating cohort in May and June during 2010 and 2015.
So as you may know, students would already-- they would have to leave their school or their college in July. By May and June, they already know what they were to do for the future, right? A more share would go to grad school, but the majority of them already searched for a job, and the majority of them have already got job offers, and that's what we get about their job outcomes.
And of course, this is the first job. What I show you, the [INAUDIBLE] are the first job. But I'll show you some additional, if I have time, additional data telling you that the first job is very important for your future jobs too. And this might be useful for you since you have not searched for a job yet, I guess.
So actually, yesterday, I was in a conference on inequality in the US. People are using detailed data in this country showing that the inequality within a cohort-- so when the graduating cohort in a lifetime income is already determined at the age of 25. So basically, your first job is super important in determining your lifetime income.
And this is also the case in China. I wouldn't have time to tell you how would-- how we implemented these surveys step by step, but one interesting thing is we have very high response rate. This is because we are not really-- they gave the survey questionnaires by individuals. Instead, we selected other individuals by some random sample method, and then we got that all of them-- this is such a big classroom and the feel of the questionnaires by the same day, the same time, the same place, that you increase the response rate.
So for the six years, we managed to survey exactly 90 universities in China. Among them, 26 belong to-- are among the elite university group. We deliberately oversampled the elite universities so that we can have enough students to compare.
So in the six years, we collected information for about 40,000 students in the graduate new year. So the first markers to show you where the night universities were located. As you see, they are widely spread across 26 provinces in China. And if you look at where their students come from, they come from all over China, you know. We don't have a university in Tibet, but you know, we still have students from Tibet and other provinces. So we have about 40,000 students, but today's talk, I'll focus on about 10,000 students of them who have scores just within 20 points around the cutoff.
If you recall, the maximum score is 750 points. So 20 points you know, is not that large, so people are relatively comparable. And so we compare students-- all of them are within 20 points around the cutoff.
So now, I come to the first set of results to show you how the exam scores affect access to elite education and also show you a little bit about how this affects other dimension like what major they would be mentoring, where they study, and their rank in college. So the first figure, the x-axis is a point to the cutoff.
So it should not indicate all on one point. Now, a group of students are one point below, or five points below the cutoff, or five points above the cutoff. The y-axis plots the average probability of attending an elite university. So what do you see-- this is 0 here. There's a very small probability that one can go to an elite university if they are below the cutoff.
But do you see this very clear jump after one is above the cutoff? And this is the increase as you're getting high scores. And this is now clearly show there's a significant change if you are about the cutoff, you are much more likely to attend an elite university.
As I said, because why I have put it here because the scores are only comparable within province, year, and track, their two tracks. So sometimes you want to isolate these facts to just compare students within the province, year, and track. So I only compare students within Beijing, just one student in Beijing with another student in Beijing. I am not comparing a student in Beijing with a student in Shandong, for example.
And after considering this, you see a similar pattern. So in terms of magnitude, if you are scoring above the cutoff, the probability of getting into an elite university would be increased by 0.15, which is about over 70% of the mean. So your probability of going to an elite university increases by 70%. And this is pretty large.
And you would wonder, you know, I would tell you why we want to use this kind of design is to make sure that the students around the cutoff are comparable, right? So we want just to show you, you know, if you look at their-- what their gender, their age, whether they rural or urban, or their family income, you will find that they are similar. There's no similar like this jump in these figures-- you find that they're fairly comparable.
If you don't do it this way, if you just look at all of those students, then you are also discounting-- you'll see a jump, because students of an elite university all have high scores are typically also are from high-income families, et cetera. And this way, we can make sure that these students are comparable.
I want to mention that a score above the cutoff not only changes whether you go to an elite university. It also changes your major, and it changes where you go to, where you study, and it changes your ranking in college. So how does this work?
So if you think about this, if you are just above the cutoff, right, you are lucky above the cutoff, but you are the worst in this eligible group. All the other students have a higher score than you, right? Is this clear? So you are worst-- so you are actually less likely to go to a good major, like in this period, economics, finance, and the law are the more popular majors.
You are less likely to be able to enroll in such a popular major because among those eligible for elite university, you are the worst. Whereas if you are now an elite group, even though you are not eligible to an elite university, compared with your peers, you are the best. So there's the interest in reverse of pattern here.
And this is what we find if you look at the probability, this is the same. Let's go point by point relative to the cutoff. If you look at the probability of enrolling in econ management or law, you see actually there's-- if you are above the cutoff, you are slightly less likely to maintain this popular major field.
And this can be explained by a slight increase in STEM and slight increase in humanity. And if you look at where the university located, they are more likely to be outside the home province because of this elite university typically, it could be in provinces far away from the home province. So they are also more likely to study outside their home province, and as I said, they are relatively worse within the eligible group.
This could be reflected by their ranking in college. So in the survey, we asked, what do you think about your rank in your class? Like, do you think you belong to 20%, top 20% or bottom 20%? What's interesting is there is a very interesting bias.
For example, only 5% of students claim that bottom 20%. It doesn't make sense, right? But that's our bias. And over 40% of students claim they are top 20%. So we are always overconfident, right? We are less likely to think we are like the bottom and more likely to think we are at the top.
But despite this interesting bias, you will see that if you are above the cutoff, you are less likely to see. On the top, you are more likely to see you are at bottom, or this is just to paint the picture that, yes, these people are eligible to elite university. They are above cutoff, but they also have some disadvantages in major and maybe college ranking. This might affect their labor market outcome too, and we need to consider this when we come to which part.
Now, I'll come to the which part. I will first show you how this affects your wage, the first job wage, and I and need to tell you a little bit about how major and other dimensions affect these findings, and what's the implication, our elite status for the students and how important the first job for your future jobs.
Just before showing the wage, as you can imagine, not everyone started looking for a job, right? Some of them would go to graduate school. So an average of 74% searched for a job. Among those that searched for a job, 74 got offers. This is not a typo. It just happened to be the case.
And so I told you in the first part, there are about 10,000 students we look at in terms of entry into college. Now we are looking at the wage part. We only have half of these students really have wage information.
And just for your information, those above the cutoff are slightly less likely to look for jobs. As you can imagine, if you go to an elite university, you might have other options, et cetera. That affects the probability, but the difference is not huge.
So if you look at the wage, you can look at this the similar graph point by point. And this is a better way we are looking at that. The y-axis now is the log which if you think about the difference between the right-hand side and the left-hand side as and the right-hand side I think the percentage change in which [INAUDIBLE].
So if you look at the difference between these two, you can't see clearly. So you have to trust me. It's about 6%. So the weighted difference would be about 6%. If you are just above the cutoff, you're monthly wages increased by 6%. And this is not-- this is about means about-- 160 RNB is about $25, $26 US. It may be not huge, but if you look at which premium, you have to divide this wage difference by the probability to increase the-- the probability of going to an elite university increased by being above the cutoff.
And this is what gives us an estimate about 40% so which is pretty large. It means that elite education has a which premium about 40%. That's about 1,000 RNB in a month. In this period, I forgot to say, if the monthly wage for these fresh graduates is about 2,500 RNB. So 1,000 basically is about 40% of the monthly increase. So roughly, you can think going to elite university the median wage would be about 3,500.
Then are no good-- like very well identified wage premium for college students in China either. But we can compare with them. If you look at other countries, like in the US, some estimate is 0. So the elite university, like the [INAUDIBLE] study-- there's no elite education wage premium.
There's one study in Italy compared students who could just go to [INAUDIBLE] was this other university, and they had an estimate of 45%. But it's difficult to compare across countries. I haven't considered a major, or location of university, or your ranking class how that effects your wage premium.
But as you can already imagine, this major and the ranking all have a disadvantage, right? As I said, you are the worst, basically, if you are above the cutoff. You are worst among the eligible group. And if you included them, that only makes your wage premium slightly larger.
If you compare-- so as I said before now, you have-- if you're above the cutoff, you are more likely to go to university-- go to elite university. But you are less likely to go to major and popular fields. So if you consider that, take care of that, you'll find actually the wage premium of elite education slightly higher from 6% to including to 7% [INAUDIBLE].
And now, come, you know, I saw you that elite education had some wage premium. However, does that mean that a young person now becomes an elite in this society? If you know about this country, you would say, oh, I don't know, because many elite dimensions cannot be captured by the wage premium.
For example, maybe going into a banking industry, finding a job in SOE, or have a [INAUDIBLE] in Beijing or Shanghai, these are typically also very important for elite status. That's going to an elite university, change all these dimensions. That's what we want to answer.
So we examined three dimensions to shed light on this question. First, we look at how the job-- which job characteristics explain the wage premium? Is that explained by your occupation industrial ownership? Or is it actually explained by something like within the individual the industrial occupation.
So you are still working in the same occupation, but you have different wage. We also define elite occupation, industrial, and ownership in an interesting way. I think. So in the data, we ask people, what is their ideal occupation, industry?
We know they're realized industry and occupation, right? We know their ideal industrial and occupation. Then this gives us some ratio if an industry like a banking, most people hope to work in. [INAUDIBLE], but very few can realize this job, then this is likely to be an elite occupation, similarly, for industry and ownership.
So this gives us some measure of eliteness of their job. And finally, we also checked some now, which benefits, like whether they got housing subsidy, whether they have all types of insurance. And then, we don't find-- in all this dimension, we don't find any of this that this means the people with elite education are also into the elite club.
So don't worry about the tables. If we do-- if we check which job characteristics explain the wage premium, in the end, we find it's not explained by their occupation or industry. It's actually explained by some variation within occupation industry. So you are not necessarily more likely to work for the bank industry or more likely to work for the government. It's within the same industry you earn a higher wage.
So if we define industry occupation by this ratio, I mentioned it to you, maybe this is a bit interesting. So for example, like manage management personnel or being a leader in a from or in the government is a occupation. Now, you typically think of this as like elite occupation. We can also measure this with data. For example, only 1% of people would realize management personnel occupation.
But if you look at how many people hope to work in this occupation, it's 10 times higher. So this ratio is only 0.1, meaning that only 1 in 10 people could realize their dream. But if you look at skilled worker, for example, you'll find a ratio-- if you look at clerks, for example, you'll find the ratio would be 4. So only 77% of people would like to work as a clerk, but 28% had to work as a clerk in the end.
So this gives us this measure of elite status or occupation. Similarly, we can look at industry or ownership, and we don't find that this is a factor being above the cutoff or not. If we also look at other dimensions like whether you have-- like [INAUDIBLE] Beijing or whether you get housing subsidy, or whether you have better insurance, or this or not, we find no difference return above the cutoff or below the cutoff.
So the message is, yes, we find a wage premium, but if you measure elite status in other like typical sociological way, you wouldn't find that being above the cutoff is enough for you to become an elite in this society. I wouldn't go to the details. But we only have the first job in our survey, right? By our design, we cannot follow these people in the labor market.
And to get some sense to understand how important the first job is, we downloaded like meetings with [INAUDIBLE] from the a major job recruitment site called jobing.com. And there, people have their CV and job history, and we look at the correlation of how the first job affects their future job wages. And we find strong persistence, and this is also true in the US, I guess. Your first job is very important in determining your future job earnings.
So the message is that even though we don't have future jobs for these individuals, our findings is likely to matter for the future too. So I come to the social mobility part. It might sound a bit confusing if, on the one hand, yes, you are earning a high wage. Of course, you have a mobility now, right, because your wage rank is increased.
But when people talk about social mobility, there's another important dimension, this intergenerational mobility. As we all know, there's always your parent's status, and your status is always positively correlated. There's always a positive line between current status and income status-- and children's status. We want to know whether this slope changed by being above or below the cutoff.
This is what I mean. So just to give you two scenarios, the red line indicates those above the cutoffs. And the blue line indicates those below the cutoff. And in the first scenario, this red line is flatter than the blue line. So I forgot to say, the x-axis is a the income rank of the parent, and the y-axis is the income rank of the children.
In every society, there's a positive slope. If your parents have a high rank, the children tended to have a high rank. What's interesting here, we're interested in if you are above the cutoff in this rank, it becomes flatter or steeper, it becomes flatter means that now, the parental income becomes less important if you are above the cutoff.
This is called increased social mobility, intergenerational mobility. And in the other case, if you are above the cutoff, actually, the line becomes even steeper. So it's like the parental status becomes even more important. I think this is what people do much talk about. You know, elite parents would have more elite kids and elite education. It's just a way for elite reproduction.
And we need to see that [INAUDIBLE] we don't know which is likely to be true. It depends on your thinking about this society. If you think the exam system is great, it levels the playing field, and the parental status should become less important once they are above the cutoff. If you think then the rich kids should even more given the same education, you wouldn't likely to expect this is the second case.
And what we find in the data, actually, is neither the case. So that's why it's interesting to see the data, because you know, if this is so important at such an important institution in China, if you search online, you'll find scholars have all types of argument and hypothesis. Some think it's a very good system, especially for the poor. And some think it's basically an illusion. It's cheating. In the end, it doesn't help the poor.
So it's really important to show the data. And this is what we find. You basically see a parallel shift, which being above the cutoff neither increases nor decreases the intergenerational link. But there are a few messages here. First, you know, if you think the exam system attenuates parental income influence, then this is the illusion. This is too naive.
The parental status is still very important. One way to look at this is to think about if your are a poor case here, for example, at the 20% to 40% income, 20 to 40 quantile income. And if you are above the cutoff, you indeed have a higher wage rank.
But if you compare with a kid from the very rich, the top 20 percentile income families, and even he or she doesn't pass the exam, his rich rank is still higher. So coming back, whether can I compete with the second-generation rich now, the answer is, it depends on how rich the second generation is.
If he is from the middle group, yes, you can compete with him or her now. But if he's from a a very, very rich family, you still cannot compete with her or him. But I want to be clear, this is not too pessimistic. In many elite institutions, actually, it's likely to be this case. If you go to elite university, if your parents are rich, you earn even more, right? So this is more optimistic than this case, but more pessimistic than the level playing field argument.
Finally, we want to understand what drives the rich premium. Is that driven by human capital? You know, you earn more. You are more productive, so you get paid more? Or is that driven by social networks? You know better students. Your classmates father had worked for the government, so you get a better job? Or is it actually signaling?
You don't necessarily learn more, but actually, you still get a high wage. So this is very difficult to pin down. So what I'll show you is some suggest [INAUDIBLE], and you know, there are very few studies trying to pin down each channel, because it's very difficult to measure any of them, as you can imagine. What is human capital, for example?
So what we do is, the typical measure of human capital is your performance in college. And the ideal measure is some test that everyone takes across universities so that it's comparable. So GPA is not great, right? Because every different university uses different ways of giving GPA.
So it's not very comparable. So there is one measure that is close to this idea most students would take. And they are standardized. So you can compare across universities. That is the national English test. Almost every student would take it. And the scores are standardized, and this I think now graded by computer, so it's comparable.
And then we have different-- many other measures in terms of certificate or exam performance in college. And we check whether there's a difference for those above the cutoff and below cutoff, and we don't find any difference. Also we asked them how many hours they study in college. And they don't study for large-- but if they study, they often study English.
So we also look at how they put their-- how their effort looked like for those above the cutoff and below the cutoff, and we find no difference either. So in all the measures of human capital, like majors, cannot explain our findings either.
So in of these measures we can have in terms of human capital, we find no difference. So it's not that we want to reject this hypothesis. But we just have no evidence that they perform better or have more-- like more sophisticated to prove they are better.
And if we look at the network, you know, if you know a little bit about China, you would think about this is about the network. So what we do is we look at how-- we ask them how you find their job. We also look at how your networks affect their reach. So when we come to the job search part, people usually use different ways of such job like off campus, job fairs, or on-campus job fairs of job website or using networks.
And we don't find evidence that those above the cutoff are more likely to use a network. If anything, we find that they are more likely to use on-campus fairs but that's a bit related to what Pamela said. Those elite universities also attract better employers, so they have on-campus fairs, which gives these people more opportunities to get better jobs.
But this is not a network channel. This is more likely to be a signalling channeling in understanding the reputation of the university of matters in terms of attracting the employers.
And if you look at how this network effects which premium, to be sure, yes, if you are above the cutoff, you go to elite university, indeed you have better networks. For example, if you measure the share of your classmate whose father has college degree or whose father is party member, indeed, the probability is higher.
So if you are above the cutoff, your classmate's background is better. That's for sure. We do find that in the data. But we found this cannot explain your wage premium. So it's not explained by your [INAUDIBLE] background, but there is one caveat in this finding is we are looking at the first job, and this type of weak ties, you know, your classmate, your schoolmates, father's connection, often matters in the long run. In the first job, maybe it doesn't matter much, but in the long run, it can matter more. We cannot study that.
And another piece of [INAUDIBLE] signaling is suggested because it's very difficult to measure signaling unless you are in the lab. In the real world, you don't really know how people are sending the signals. We asked them something about drug discrimination, what kind of discrimination they experienced when they are on the drug market like we asked like gender, appearance, accent, rural, et cetera.
We don't find any difference in this dimension. There is only one dimension, which is a very sizable difference, not precisely estimated, is that if you are above the cutoff, you are less likely to say that you are discriminated because of a university rank. This is almost mechanical, right? Because if you are above the cutoff, you are more likely to go to elite university, and you are less likely to think you will be discriminated or you are discriminated because of what the university rank.
But this is-- all of this, and if you think discrimination of the negatives are signaling then this is also more consistent with the signaling mechanism. So in this part, it's not that we want to reject any hypothesis. We don't need-- this could be a paper without this part. But we want just to-- now we just-- let's have try as many measures as possible and see which is more consistent with the data.
And in the end, it's more consistent with the signaling mechanism. And in reflection, in retrospect, I wasn't very surprised. Initially, I was a bit disappointed. Oh, we don't find human capital in this. But now, I kind of think, you know, you think about this education institution, which is very strict in interest, but very relaxed on exit.
So students don't have a lot of incentive to learn much. I don't know what they have studied in Chinese college, whether you shared my feelings, but they don't have much incentives to learn for graduation, for example. So yeah, I can stop here, but feel free to ask questions.
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Ruixue Jia, Professor of Economics at UC San Diego, researches the effects of elite college education on access to means of economic and social mobility in China. Co-sponsored by the Cornell Institute for China Economic Research. Recorded October 31, 2016 as part of East Asia Program’s Cornell Contemporary China Initiative.