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The medium-run effect of China's higher education expansion on the unemployment of college graduates

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  • Xing, Chunbing
  • Yang, Peng
  • Li, Zhilong

Abstract

China's unemployment rate for new college graduates has increased significantly in recent years, and many people attribute this increase to the higher education expansion policy. In this paper, we use three nationally representative data sets for 2000, 2005, and 2010 to investigate the short and medium term effects of the expansion policy on the unemployment of college graduates. Treating higher education expansion as an exogenous shock and using a difference-in-difference (DID) strategy, we find that this policy increased the unemployment rate of new college graduates in the short run, but the unemployment rate kept declining and the dis-employment effect mostly disappeared after five years. We also find some heterogeneous effects by gender, region, and city.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:chieco:v:51:y:2018:i:c:p:181-193
    DOI: 10.1016/j.chieco.2017.05.005
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    3. Tianshu Chu & Qiang Wen, 2019. "Does College Education Promote Entrepreneurship in China?," Journal of Labor Research, Springer, vol. 40(4), pages 463-486, December.
    4. Fengyan Dai & Fang Cai & Yu Zhu, 2022. "Returns to higher education in China – evidence from the 1999 higher education expansion using a fuzzy regression discontinuity," Applied Economics Letters, Taylor & Francis Journals, vol. 29(6), pages 489-494, March.
    5. Kong, Dongmin & Zhang, Bohui & Zhang, Jian, 2022. "Higher education and corporate innovation," Journal of Corporate Finance, Elsevier, vol. 72(C).
    6. Zhu, Chen & Qiu, Zhiyi & Liu, Fengjun, 2021. "Does innovation stimulate employment? Evidence from China," Economic Modelling, Elsevier, vol. 94(C), pages 1007-1017.
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    8. Somani, Ravi, 2021. "The returns to higher education and public employment," World Development, Elsevier, vol. 144(C).
    9. Duan, Yide & Zhang, Haotian & Wang, Wenfu & Ao, Xiaoyan, 2022. "The effects of China's higher education expansion on urban and rural intergenerational mobility," China Economic Review, Elsevier, vol. 73(C).
    10. Huang, Bin & Zhu, Yu, 2020. "Higher Education Expansion, the Hukou System, and Returns to Education in China," IZA Discussion Papers 12954, Institute of Labor Economics (IZA).
    11. Qiao Wen, 2022. "Estimating Education and Labor Market Consequences of China’s Higher Education Expansion," Sustainability, MDPI, vol. 14(13), pages 1-25, June.
    12. Huang, Bin & Tani, Massimiliano & Wei, Yi & Zhu, Yu, 2022. "Returns to education in China: Evidence from the great higher education expansion," China Economic Review, Elsevier, vol. 74(C).
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    More about this item

    Keywords

    Higher education; Unemployment; China;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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