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China's Higher Education Expansion and its Labor Market Consequences

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  • Li, Shi

    (Beijing Normal University)

  • Xing, Chunbing

    (Renmin University of China)

Abstract

Using a 1/5 random draw of the 1% census of 2005, we investigate how China’s higher education expansion commenced in 1999 affects the education opportunities of various population groups and how this policy affects the labor market. Treating the expansion as an experiment and using a LATE framework, we find that higher education expansion increased the probability of go to college tremendously. Different populations “benefit” from this policy differently however. Minority female, those from central-western region and from rural areas are less likely to benefit from it. One-child families are more responsive to this policy. Using higher education resources at the provincial level as another dimension of variation, and using a difference-in-difference strategy, we find that the education expansion decreased the within sector inequality of population with above high school (inclusive) education. This is primarily due to the increase of the income level for high school graduate. That of the college graduate deceased, but only slightly and not significantly.

Suggested Citation

  • Li, Shi & Xing, Chunbing, 2010. "China's Higher Education Expansion and its Labor Market Consequences," IZA Discussion Papers 4974, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4974
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    Cited by:

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    2. Constant, Amelie F. & Tien, Bienvenue N. & Zimmermann, Klaus F. & Meng, Jingzhou, 2011. "China's Latent Human Capital Investment: Achieving Milestones and Competing for the Top," IZA Discussion Papers 5650, Institute of Labor Economics (IZA).
    3. Ren Mu & Yang Du, 2017. "Pension Coverage for Parents and Educational Investment in Children: Evidence from Urban China," The World Bank Economic Review, World Bank, vol. 31(2), pages 483-503.
    4. Xiong, Weiyan & Yang, Jiale & Shen, Wenqin, 2022. "Higher education reform in China: A comprehensive review of policymaking, implementation, and outcomes since 1978," China Economic Review, Elsevier, vol. 72(C).
    5. Liu, Yang & Yang, Yaowu, 2022. "New “useless education theory”: Highly educated parents' expectations for their children's education—Evidence from the one-child policy," China Economic Review, Elsevier, vol. 72(C).
    6. Dai, Li & Martins, Pedro S., 2024. "The Wage Effects of Polytechnic Degrees: Evidence from the 1999 China Higher Education Expansion," GLO Discussion Paper Series 1399, Global Labor Organization (GLO).
    7. Heckman, James J. & Yi, Junjian, 2012. "Human Capital, Economic Growth, and Inequality in China," IZA Discussion Papers 6550, Institute of Labor Economics (IZA).
    8. Yi Fan & Junjian Yi & Junsen Zhang, 2021. "Rising Intergenerational Income Persistence in China," American Economic Journal: Economic Policy, American Economic Association, vol. 13(1), pages 202-230, February.
    9. Knight, John & Deng, Quheng & Li, Shi, 2017. "China’s expansion of higher education: The labour market consequences of a supply shock," China Economic Review, Elsevier, vol. 43(C), pages 127-141.
    10. Wang, Haining & Cheng, Zhiming & Smyth, Russell & Sun, Gong & Li, Jie & Wang, Wangshuai, 2022. "University education, homeownership and housing wealth," China Economic Review, Elsevier, vol. 71(C).
    11. Yao, Yao, 2016. "Higher education expansion, economic reform and labor productivity," Working Paper Series 19506, Victoria University of Wellington, School of Economics and Finance.
    12. Liu, Yunbo & Yin, Lu & Guo, Jianru, 2021. "The quality of higher education and overeducation: Where should higher education funding go?," Finance Research Letters, Elsevier, vol. 41(C).
    13. Yu, Nannan & Yu, Bo & de Jong, Martin & Storm, Servaas, 2015. "Does inequality in educational attainment matter for China's economic growth?," International Journal of Educational Development, Elsevier, vol. 41(C), pages 164-173.
    14. Bickenbach, Frank & Liu, Wan-Hsin, 2011. "Regional inequality of higher education in China and the role of unequal economic development," Kiel Working Papers 1692, Kiel Institute for the World Economy (IfW Kiel).
    15. Yao, Yao, 2016. "Higher education expansion, economic reform and labor productivity," Working Paper Series 5357, Victoria University of Wellington, School of Economics and Finance.
    16. Qin, Xuezheng & Zhuang, Castiel Chen & Yang, Rudai, 2017. "Does the one-child policy improve children's human capital in urban China? A regression discontinuity design," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 287-303.
    17. Liu, Ling & Wan, Qian, 2017. "The Effect of Education Expansion on Intergenerational Mobility of Education: Evidence from China," MPRA Paper 80616, University Library of Munich, Germany.
    18. Shen, Jie, 2022. "Universities as financing vehicles of (sub)urbanisation: the development of university towns in Shanghai," Land Use Policy, Elsevier, vol. 112(C).
    19. Shuang Chen, 2022. "The Positive Effect of Women’s Education on Fertility in Low-Fertility China," European Journal of Population, Springer;European Association for Population Studies, vol. 38(1), pages 125-161, March.
    20. Bollinger, Christopher & Ding, Xiaozhou & Lugauer, Steven, 2022. "The expansion of higher education and household saving in China," China Economic Review, Elsevier, vol. 71(C).
    21. Wang, Le, 2012. "Economic transition and college premium in urban China," China Economic Review, Elsevier, vol. 23(2), pages 238-252.

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    Keywords

    income level; LATE; higher education expansion; difference in difference; China;
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