Health Human Capital, Height and Wages in China

Abstract

We estimate the returns to height using data from 12 Chinese cities. We present both ordinary least squares (OLS) and two-stage least squares (TSLS) estimates. In the latter height is instrumented using proxies for health human capital, accumulated in childhood and adolescence, which influence adult height. The TSLS estimates are much higher, reflecting the fact that the OLS estimates are determined by the random genetic factors influencing height, while the TSLS estimates also take into account returns from investment in health human capital during childhood and adolescence. These results imply considerable returns to investment in health human capital.

Decomposing the effect of height on income in China: The role of market and political channels

“…A positive relationship is observed in Figures 1(a) and (b), indicating a height premium in earnings for males as well as females. This is in line with previous findings for China reported in Gao and Smyth (2010). Table 3 shows differences in height between Communist Party members and non-members.…”

“…There is the wage premium associated with being a member of the Party in China (Bishop & Liu 2008;Appleton et al, 2009). However, little is known about how height is related to Party membership, although a height premium has been observed in the Chinese labor market (Gao & Smyth 2010). Using individual level data for China, this paper has attempted to decompose the height premium on earnings into a premium through the political channel and a premium through the market channel.…”

“…Existing studies have explored the role played by height in the labor market and found a height-wage premium in developed Western countries (Schultz 2002;Heineck 2005Heineck , 2009Case & Paxson 2008, 2009Kortt & Leigh 2010). The height-wage premium has also been observed in China (Gao & Smyth 2010) 3 . Height reflects the degree of investment in health human capital, which improves performance in the labor market.…”

“…The third is studies examining the changing role of Party membership in obtaining elite occupations and other benefits (Li & Walder, 2001;Walder, 1995). The fourth is studies examining the economic returns to physical appearance in the Chinese labor market, including height (Gao & Smyth, 2010) and weight (Shimokawa, 2008).…”

“…Returns to human capital have increased over the market reform period (Gao & Smyth, 2015). Studies have identified that physical appearance captured by beauty (Hamermesh et al, 2002), height (Gao & Smyth, 2010) and weight (Shimokawa, 2008) earn economic rents/penalties. While the market has increased in importance in the allocation of resources, the wage premium from being a Party member has not declined.…”