Estimation of the Rate of Return to Higher Education Based on Least Squares Method and Mincer Equation Model
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Peng Weng, Ling Yuan, Chaonan Li, Cong Yi, Yin Zhang
The rate of return to higher education, also called the return on investment of higher education, is an indicator reflecting the economic benefits of higher education investment from the perspective of human capital theory; its size reflects the advantages and disadvantages of higher education investment to a considerable extent, and then provides investment decisions of higher education investment for individuals and society. Therefore, the study of the rate of return to higher education can not only analyze the residents' demand for higher education, but also help to correctly estimate the willingness of individuals and families to pay for higher education; at the same time, it is also an important means to analyze the demand and supply of higher education funds. On the basis of summarizing and analyzing previous related studies, this paper expounds the theoretical framework, policy connotation, current situation and existing problems of the rate of return study of higher education, proposes the investment return rate calculation model based on least square method and Mincer equation, and estimate the rate of return of higher education in selected regions and countries. The results of this paper provide a reference for the individual, society or country to make investment decisions on higher education or to further develop the theoretical research on the return on investment of higher education.
Rate of return to higher education, Least squares method, Mincer equation model, Calculation model of rate of return