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China's Higher Education Expansion and its Labor Market Consequences

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  • 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.

Suggested Citation

  • Li, Shi & Xing, Chunbing, 2010. "China's Higher Education Expansion and its Labor Market Consequences," IZA Discussion Papers 4974, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4974
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    References listed on IDEAS

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    1. James J. Heckman & Xuesong Li, 2004. "Selection bias, comparative advantage and heterogeneous returns to education: evidence from China in 2000," Pacific Economic Review, Wiley Blackwell, vol. 9(3), pages 155-171, October.
    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, April.
    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. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    5. Xing, Chunbing, 2009. "Migration, Self-selection, and Income Distributions: Evidence from Rural and Urban China," MPRA Paper 17036, University Library of Munich, Germany.
    6. 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.
    7. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    8. 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).
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    Citations

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    Cited by:

    1. Constant, Amelie & Meng, Jingzhou & Tien, Bienvenue & Zimmermann, Klaus F, 2011. "China's Latent Human Capital Investment: Achieving Milestones and Competing for the Top," CEPR Discussion Papers 8376, C.E.P.R. Discussion Papers.
    2. Mu, Ren & Du, Yang, 2012. "Pension Coverage for Parents and Educational Investment in Children: Evidence from Urban China," IZA Discussion Papers 6797, Institute for the Study of Labor (IZA).
    3. Knight, John & Deng, Quheng & Li, Shi, 2017. "China’s expansion of higher education: The labour market consequences of a supply shock," China Economic Review, Elsevier, vol. 43(C), pages 127-141.
    4. Wang, Le, 2012. "Economic transition and college premium in urban China," China Economic Review, Elsevier, vol. 23(2), pages 238-252.
    5. Yu, Nannan & Yu, Bo & de Jong, Martin & Storm, Servaas, 2015. "Does inequality in educational attainment matter for China's economic growth?," International Journal of Educational Development, Elsevier, vol. 41(C), pages 164-173.
    6. Wang, Xiaojun & Fleisher, Belton M. & Li, Haizheng & Li, Shi, 2014. "Access to college and heterogeneous returns to education in China," Economics of Education Review, Elsevier, vol. 42(C), pages 78-92.
    7. James J. Heckman & Junjian Yi, 2012. "Human Capital, Economic Growth, and Inequality in China," NBER Working Papers 18100, National Bureau of Economic Research, Inc.
    8. Bickenbach, Frank & Liu, Wan-Hsin, 2011. "Regional inequality of higher education in China and the role of unequal economic development," Kiel Working Papers 1692, Kiel Institute for the World Economy (IfW).
    9. repec:oup:wbecrv:v:31:y:2017:i:2:p:483-503. is not listed on IDEAS
    10. Yao, Yao, 2016. "Higher education expansion, economic reform and labor productivity," Working Paper Series 5357, Victoria University of Wellington, School of Economics and Finance.
    11. repec:eee:jcecon:v:45:y:2017:i:2:p:287-303 is not listed on IDEAS
    12. Liu, Ling & Wan, Qian, 2017. "The Effect of Education Expansion on Intergenerational Mobility of Education: Evidence from China," MPRA Paper 80616, University Library of Munich, Germany.

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    Keywords

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

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