Productivity Improvement or Signal Transmission: Different Paths of Education Returns
Liu Jiansheng

Abstract
Individual income is positively correlated with education level, which has been confirmed by various empirical analyses worldwide. However, the interpretation of this positive correlation in the literature is different. According to the theory of human capital represented by Jacob Mincer, the higher the individual's education level is, the higher the income is, because the individual's productivity is improved in the process of receiving education. The signal transmission theory represented by Michael spencer is considered to be the education will not increase the productivity of the individual, but the corresponding diploma in education process as a "signal" delivered the individual inherent productivity levels, so as to make the employer will give high degrees higher wages in the labor market. In this paper, the education system is combined to estimate the return rate of education in China, and the devotion of production theory and signal transmission theory in the whole education. For this reason, this paper selected and screened 23749 data of 12 provinces and cities from the Chinese health and nutrition survey (CHNS) website for mixed OLS regression analysis. The results show that the signaling function of college diploma and college diploma is very strong under China's education system. The value of a high school diploma depends on competitors for the job.

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