Estimating the Impact of Rural Hukou Status on Earnings for College Graduates in China

A growing body of literature explores the effect of higher education on the urban–rural divide in China. Despite an increasing number of rural students gaining access to college, little is known about their performance in college or their job prospects after graduation. Using nationally representative data from over 40,000 urban and rural college students, we examine rural students’ college performance and estimate the impact of rural status on students’ first job wages in comparison to their urban peers. Our results indicate that once accepted into college, rural students perform equally as well, if not better, than their urban counterparts. Additionally, we discovered that rural students earn a 6.2 per cent wage premium compared to their urban counterparts in their first job after graduation. Our findings suggest the importance of expanding access to higher education for rural students, as it appears to serve as an equalizer between urban and rural students despite their significantly different backgrounds.