GEP Webinar: Mingyu Chen (Princeton University)

The value of US college education in global labour markets: Experimental evidence from China

Abstract:  One million international students study in the US each year and the majority of them compete in global labor markets after graduation. I conduct a large-scale field experiment and a companion employer survey to study how employers in China value US college education. I sent over 27,000 fictitious online applications to business and computer science jobs in China, randomizing the country of college education. I find that US-educated applicants are on average 18 percent less likely to receive a callback than applicants educated in China, with applicants from very selective US institutions underperforming those from the least selective Chinese institutions. The US-China callback gap is smaller at high-wage jobs, consistent with employers fearing US-educated applicants have better outside options and will be harder to hire and retain. The gap is also smaller at foreign-owned firms, consistent with Chinese-owned firms knowing less about American education. Controlling for high school quality, test scores, or US work experiences does not attenuate the gap, suggesting that it is not driven by employer perceptions of negative selection. A survey of 507 hiring managers at college career fairs finds consistent and additional supporting evidence for the experimental findings.