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Expanding College Access in Taiwan, 1978-2014: Effects on Graduate Quality and Income Inequality

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  • Shao-Hsun Keng
  • Chun-Hung Lin
  • Peter F. Orazem

Abstract

Between 1990 and 2014, Taiwan increased the college share of its labor force from 7 to 32 percent by converting junior colleges to 4-year colleges. Such a rapid surge in skill supply should suppress college wages and lower wage income inequality. Instead, wage inequality rose 7 percent since 1978. We show that the surge of weaker college graduates made them poor substitutes for better-trained college graduates and led to an increase in wage inequality within skill groups. Rising wage inequality due to increased variation in the quality of young college graduates added another source of inequality to the Taiwan labor market. The Taiwan case shows that increasing college access alone will not lower inequality.

Suggested Citation

  • Shao-Hsun Keng & Chun-Hung Lin & Peter F. Orazem, 2017. "Expanding College Access in Taiwan, 1978-2014: Effects on Graduate Quality and Income Inequality," Journal of Human Capital, University of Chicago Press, vol. 11(1), pages 1-34.
    • Handle: RePEc:ucp:jhucap:doi:10.1086/690235
    DOI: 10.1086/690235
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    1. Shao-Hsun Keng & Peter F. Orazem, 2019. "Performance pay, the marriage market and rising income inequality in Taiwan," Review of Economics of the Household, Springer, vol. 17(3), pages 969-992, September.
    2. Wenxiao Wang & Christopher Findlay & Shandre Thangavelu, 2021. "Trade, technology, and the labour market: impacts on wage inequality within countries," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 35(1), pages 19-35, May.
    3. Juzhong Zhuang, 2023. "Income and Wealth Inequality in Asia and the Pacific: Trends, Causes, and Policy Remedies," Asian Economic Policy Review, Japan Center for Economic Research, vol. 18(1), pages 15-41, January.
    4. Laporšek, Suzana & Orazem, Peter F. & Vodopivec, Milan & Vodopivec, Matija, 2021. "Winners and losers after 25 years of transition: Decreasing wage inequality in Slovenia," Economic Systems, Elsevier, vol. 45(2).

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