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The Impact of Higher Education Expansion on the Educational Wage Premium in Taiwan: 1985 to 2015

Author

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  • Chien-Liang Chen

    (Department of Economics, National Chi Nan University, Nantoui 545, Taiwan)

  • Lin-Chuan Chen

    (Strategy and Development of Emerging Industries, National Chi Nan University, Nantoui 545, Taiwan)

Abstract

This research investigates the impact of higher education expansion on the educational wage premium from a long-term perspective in Taiwan. By using 1985 to 2015 Manpower Utilization Survey (MUS) data with the difference-in-difference-in-differences model (DDD), this study analyzes the change of the wage premium of university educated versus lower-than-university educated counterparts across the expansion of higher education since 1995. The number of universities in Taiwan tripled between 1995 and 2005, from 50 to more than 150, with upgrading of about 100 technology colleges and vocational schools additionally. Dramatic expansion of universities as well as the number of university graduates will shrink the university wage premium for the young generation who entered into the labor market after year 2000, but the older generation will be less affected. The empirical results show that the wages premium of university graduates of the younger generation is 12% to 21% lower than their older generation counterparts due to the higher-education expansion.

Suggested Citation

  • Chien-Liang Chen & Lin-Chuan Chen, 2021. "The Impact of Higher Education Expansion on the Educational Wage Premium in Taiwan: 1985 to 2015," IJFS, MDPI, vol. 9(3), pages 1-12, July.
    • Handle: RePEc:gam:jijfss:v:9:y:2021:i:3:p:38-:d:601698
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    References listed on IDEAS

    as
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    2. Xinxin Ma, 2019. "The Impact of Higher Education Expansion Policy on the Wage of College Graduates in China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(5), pages 1-68, May.
    3. Juan Yang & Man Gao, 2018. "The impact of education expansion on wage inequality," Applied Economics, Taylor & Francis Journals, vol. 50(12), pages 1309-1323, March.
    4. Francis Green & Golo Henseke, 2021. "Europe’s evolving graduate labour markets: supply, demand, underemployment and pay," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-13, December.
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    7. Oppedisano, Veruska, 2014. "Higher education expansion and unskilled labour market outcomes," Economics of Education Review, Elsevier, vol. 40(C), pages 205-220.
    8. Gindling, T. H. & Sun, Way, 2002. "Higher education planning and the wages of workers with higher education in Taiwan," Economics of Education Review, Elsevier, vol. 21(2), pages 153-169, April.
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