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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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    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. Somani, Ravi, 2021. "The returns to higher education and public employment," World Development, Elsevier, vol. 144(C).
    3. agarwal, shekhar & Gordon, Anna, 2022. "Complexities for the Indian Economy of China's Growing Technological Competence," OSF Preprints fk3r7, Center for Open Science.
    4. Meng, Xin, 2023. "China's 40 Years Demographic Dividend and Labor Supply: The Quantity Myth," IZA Discussion Papers 16207, Institute of Labor Economics (IZA).
    5. 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.
    6. 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.
    7. 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.
    8. Mian Huang & Chunbing Xing & Xiaoyong Cui, 2022. "Does College Location Affect the Location Choice of New College Graduates in China?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(3), pages 135-160, May.
    9. Qiao Wen, 2022. "Estimating Education and Labor Market Consequences of China’s Higher Education Expansion," Sustainability, MDPI, vol. 14(13), pages 1-25, June.
    10. Shanshan Liu & Feng Yu & Cheng Yan, 2023. "The Impact of Higher Education Expansion on Subjective Well-Being during the COVID-19 Pandemic: Evidence from Chinese Social Survey," Sustainability, MDPI, vol. 15(7), pages 1-20, March.

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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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