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China's Higher Education Expansion and its Labor Market Consequences

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Author Info

  • Li, Shi

    ()
    (Beijing Normal University)

  • Xing, Chunbing

    ()
    (Beijing Normal University)

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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4974.

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Length: 34 pages
Date of creation: May 2010
Date of revision:
Publication status: forthcoming as `China’s Higher Education Expansion and Unemployment of College Graduates with S. Li and J. Whalley in: China Economic Review, 2014
Handle: RePEc:iza:izadps:dp4974

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Related research

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

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References

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  1. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
  2. Yao Amber Li & John Whalley & Shunming Zhang & Xiliang Zhao, 2011. "The Higher Educational Transformation of China and Its Global Implications," The World Economy, Wiley Blackwell, vol. 34(4), pages 516-545, 04.
  3. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U.S. Wage Inequality: Re-Assessing the Revisionists," NBER Working Papers 11627, National Bureau of Economic Research, Inc.
  4. Meng, Xin & Gregory, Bob, 2007. "Exploring the Impact of Interrupted Education on Earnings: The Educational Cost of the Chinese Cultural Revolution," IZA Discussion Papers 2548, Institute for the Study of Labor (IZA).
  5. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, Elsevier, vol. 80(1), pages 123-129, July.
  6. Heckman, James J. & Li, Xuesong, 2003. "Selection Bias, Comparative Advantage and Heterogeneous Returns to Education: Evidence from China in 2000," IZA Discussion Papers 829, Institute for the Study of Labor (IZA).
  7. Xing, Chunbing, 2009. "Migration, Self-selection, and Income Distributions: Evidence from Rural and Urban China," MPRA Paper 17036, University Library of Munich, Germany.
  8. Zhang, Junsen & Zhao, Yaohui & Park, Albert & Song, Xiaoqing, 2005. "Economic returns to schooling in urban China, 1988 to 2001," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 730-752, December.
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Cited by:
  1. 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 for the Study of Labor (IZA).
  2. Heckman, James J. & Yi, Junjian, 2012. "Human Capital, Economic Growth, and Inequality in China," IZA Discussion Papers 6550, Institute for the Study of Labor (IZA).
  3. Wang, Le, 2012. "Economic transition and college premium in urban China," China Economic Review, Elsevier, Elsevier, vol. 23(2), pages 238-252.

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