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Higher Education Expansion in China, 1999–2003: Impact on Graduate Employability

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  • Dongshu Ou
  • Zhong Zhao

Abstract

We examine the impact of China's higher education expansion on labor market outcomes for young college graduates using China's 2005 1 Percent Population Sample Survey. Exploiting variations in the expansion of university places across provinces and high school cohorts between 1999 and 2003, we apply a difference‐in‐differences model and take into account the demand‐side effect by using the Bartik index. We find that the expansion of higher education in China decreased unemployment rates among males and college graduates in the short term. However, the policy decreased women's labor force participation and individual earnings in high‐skilled white‐collar jobs. We further discuss potential channels affecting the outcomes that were observed. Our results illustrate the broad economic benefits of higher education. The findings shed new light on the contribution of young skilled labor in the economic growth of China and call for policies that can alleviate the short‐term negative impact of higher education on individual students and maximize human capital. Our study also provides an interesting example of the consequences of the unequal expansion of higher education opportunities on the labor market of an emerging economy.

Suggested Citation

  • Dongshu Ou & Zhong Zhao, 2022. "Higher Education Expansion in China, 1999–2003: Impact on Graduate Employability," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(2), pages 117-141, March.
    • Handle: RePEc:bla:chinae:v:30:y:2022:i:2:p:117-141
    DOI: 10.1111/cwe.12412
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    Cited by:

    1. 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.
    2. agarwal, shekhar & Gordon, Anna, 2022. "Complexities for the Indian Economy of China's Growing Technological Competence," OSF Preprints fk3r7, Center for Open Science.
    3. Qiao Wen, 2022. "Estimating Education and Labor Market Consequences of China’s Higher Education Expansion," Sustainability, MDPI, vol. 14(13), pages 1-25, June.
    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. 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.
    6. Xiaohang Zhao & Yang Feng & Lei Jin & Skylar Biyang Sun, 2024. "Unraveling the Nexus between Overeducation and Depressive Symptoms in China: The Roles of Perceived Fairness of Earnings and Job Autonomy," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 19(4), pages 1877-1902, August.

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