Time: 3:30 pm to 5:00 pm, Friday, April 12

Venue: LIB 1117

Speaker: Yuheng Zhao, Assistant Professor at Renmin University of China

Host: Peiyuan Li, Assistant Professor of Political Economy at Duke Kunshan University

Speaker’s bio: Yuheng Zhao is an assistant professor at Renmin University of China, specializing in development economics, labor economics, and economic history. His research primarily centers on the impact of reforms within the public sector on human capital formation, allocation, and structural transformation in China. He earned his PhD from Boston University.

Abstract: To study the impacts of talent allocation on private sector growth and innovation this paper exploits a 1994 reform of the Chinese labor market. The reform terminated the government-oriented job allocation for tertiary graduates. Using a generalized DID framework and Regression Discontinuity Design, I find that after the reform, tertiary graduates were more likely to work in the private sector and their earnings decreased. The expansion of the talent pool and the decrease in hiring costs led to a boom in the private sector. Prefectures with more tertiary students who graduated from industry-related majors had a larger number of private firm entries in that industry after the reform. The reform also stimulated innovation activities. Prefectures with more higher education institutions had more design patents and trademarks, and it did not crowd out other types of innovations. Consistent with the private sector expansion, there are more private sector innovations and fewer public sector innovations.