Higher Education Versus On‐the‐Job Learning: Evidence on Human Capital Accumulation in China Over Three Decades

ABSTRACT This study examines the long‐term evolution of the returns to higher education and work experience in China during a period of profound economic and institutional transformation. Using multiple nationally based household surveys spanning 1992–2021, we investigate how market reforms, higher education expansion, and structural upgrading have affected the market value of human capital. We find that higher education continues to generate substantial earnings premiums. However, the return to university education increased continuously over the sample period, while the return to 3‐year college education plateaued after the late 2000s, resulting in a widening earnings gap. Graduates of elite universities earn significantly higher returns than graduates of other institutions. The returns to work experience exhibit substantial heterogeneity across career stages and education groups, suggesting that formal schooling and on‐the‐job learning have become increasingly complementary as production has shifted toward more technology‐ and skill‐intensive activities.