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Higher Education Expansion and Labor Market Outcomes for Young College Graduates

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  • Ou, Dongshu

    (Chinese University of Hong Kong)

  • Zhao, Zhong

    (Renmin University of China)

Abstract

We examine the causal impact of China's higher education expansion on labor market outcomes for young college graduates using China's 2005 1% Population Sample Survey. Exploiting variation in the expansion of university spots across provinces and high school cohorts and applying a difference-in-differences model, we find that the expansion of higher education in China decreases unemployment rates, especially among males and high school graduates. However, the policy also decreases women's labor force participation and individual earnings in highly-skilled white-collar jobs. We further discuss potential channels affecting the observed outcomes. Our results illustrate the strong demand for a skilled labor force in China and the broad economic benefits of higher education.

Suggested Citation

  • Ou, Dongshu & Zhao, Zhong, 2016. "Higher Education Expansion and Labor Market Outcomes for Young College Graduates," IZA Discussion Papers 9643, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9643
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    References listed on IDEAS

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    1. Massimiliano Bratti & Daniele Checchi & Guido De Blasio, 2008. "Does the Expansion of Higher Education Increase the Equality of Educational Opportunities? Evidence from Italy," LABOUR, CEIS, vol. 22(s1), pages 53-88, June.
    2. Arnaud Chevalier & Joanne Lindley, 2009. "Overeducation and the skills of UK graduates," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 172(2), pages 307-337, April.
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    5. Ayako Kondo & Dongshu Ou, 2010. "In Search of a Better Life: The Occupational Attainment of Rural and Urban Migrants in China," ISER Discussion Paper 0793, Institute of Social and Economic Research, Osaka University.
    6. Martin Carnoy, 2011. "As Higher Education Expands, Is It Contributing To Greater Inequality?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 215(1), pages 34-47, January.
    7. Dongshu Ou & Yuna Hou, 2019. "Bigger Pie, Bigger Slice? The Impact of Higher Education Expansion on Educational Opportunity in China," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(3), pages 358-391, May.
    8. repec:wyi:journl:002165 is not listed on IDEAS
    9. Wang, Xiaojun & Fleisher, Belton M. & Li, Haizheng & Li, Shi, 2007. "Access to Higher Education and Inequality: The Chinese Experiment," IZA Discussion Papers 2823, Institute of Labor Economics (IZA).
    10. Li, Shi & Whalley, John & Xing, Chunbing, 2014. "China's higher education expansion and unemployment of college graduates," China Economic Review, Elsevier, vol. 30(C), pages 567-582.
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    Cited by:

    1. Wang, Feicheng & Kis-Katos, Krisztina & Zhou, Minghai, 2020. "Trade Liberalization and the Gender Employment Gap in China," IZA Discussion Papers 13626, Institute of Labor Economics (IZA).
    2. Xing, Chunbing & Yang, Peng & Li, Zhilong, 2018. "The medium-run effect of China's higher education expansion on the unemployment of college graduates," China Economic Review, Elsevier, vol. 51(C), pages 181-193.
    3. Somani, Ravi, 2021. "The returns to higher education and public employment," World Development, Elsevier, vol. 144(C).
    4. Dongshu Ou & Yuna Hou, 2019. "Bigger Pie, Bigger Slice? The Impact of Higher Education Expansion on Educational Opportunity in China," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(3), pages 358-391, May.
    5. Wei Si, 2022. "Higher education expansion and gender norms: evidence from China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(4), pages 1821-1858, October.

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    More about this item

    Keywords

    unemployment; labor force participation; higher education expansion; wage; difference-in-differences;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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