CSAE Working Paper WPS/2016-04 China’sExpansionofHigherEducation:theLabourMarket ConsequencesofaSupplyShock JohnKnight1,DengQuheng2andLiShi3 March2016 ͳǤǡ ǡ ǡǡ ǡ Ǥ̷ ǤǤ Ǥ ʹ ǡ ǡ ǡ ̷ ǤǤ ͵ǡ ǡ ̷ǤǤ Centre for the Study of African Economies Department of Economics . University of Oxford . Manor Road Building . Oxford OX1 3UQ T: +44 (0)1865 271084 . F: +44 (0)1865 281447 . E: [email protected] . W: www.csae.ox.ac.uk Abstract ͳͻͻͺǦʹͲͲͺ Ǧ Ǥ ǡ Ǥ ǡ . ǣ ǡǡ Ǯ ǯǤ ǡ ǡ ǡǦ Ǧ Ǥ ǡ ǡ Ǥ Ǥ ǯ Ǥ KeyWords.Ǣ ǢǢ Ǣ Ǣ JELClassification.ʹͳǡʹ͵ǡʹͶǡ͵ͳ 2 1. Introduction ͳͻͻͻǡ Ǥͳͻͻͺ ͵ǤͶ ȋ Ȍ Ǥ ǡʹͲͲͺǡʹͲǤʹǤ Ǧ ǡ ͳͻΨ Ǥ ͳǡͳͻͺͺʹͲͲͺǤ ͳǤͳ ͳͻͻͺ Ǥͳ ʹͲͲͺǤ ǡ ͳǤͲ ʹͲͲͳȋͳͻͻͳͻͻͺȌͷǤͳʹͲͲͺȋʹͲͲͶʹͲͲͷȌǤͶ Ȃ ǫ ʹ Ǥ ͵ ǡ Ͷ Ǥ ͷǤ ȋȌ Ǥ Section 7 examines whether the CHIP surveys can distinguish between the direct effects of quantitative expansion and the indirect effects of that expansion on quality. Section 8 reports the empirical estimations obtained from the annual National Bureau of Statistics urban household surveys covering the years 20022008. Section 9 concludes and reflects. 2. ANaturalExperiment? Ͷ ǣ ,ChinaStatisticalYearbook2009ǡʹǤͷǡʹǤʹǤǤǮ ǯ ȋȌ ȋ ȌǤ 3 ǡ Ǯǯ ǣȋȌͳͻͻͺȋͻͳΨȌ ȋͻʹΨȌǡ ȋȌ ȋͷͲΨȌ ȋʹΨΨȌǡȋȌ ȋΨȌȋͳʹΨȌǤͷ 0 2 million students 4 6 Figure 1. Enrolment in regular institutions of higher education in China, 1988Ǧ2009 millionstudents 1990 1995 2000 Year 2005 2010 ͳͻͺͺǦͳͻͻͺ ȋ ͻǤΨ Ȍ ͳͻͻͺǦʹͲͲͺȋͻǤͺΨȌǡǦ ȋ ͳͳǤʹ ͳͲǤ͵Ψ ȌǤ ͷǡWorldDevelopmentIndicators2002ǡʹǤͳʹǤȋ ǦǦ ȌǤ ǡChinaStatisticalYearbook2009ǡʹǤ͵ʹǤͷǤ 4 ǡ ǡ Ǥ ǡ Ǥ Ǧ ȋͳͻͻǦʹͲͲͲȌǡ ͳͻͻǤ ͵ǤͺΨ ͵ǤͷʹͲͲͲǤ Ǧ ǦͳͻͻͲǤ Ǥ ǡ ͳͻͻͻ ͳǦʹͲǦ ͷΨǤ Ǥ ͳͻͻͻ ͷͲΨǤ Ǥ ǡ Ǥ ǡ Ǥ ǡǦ ǡ Ǥ Ǥ ǡ ǦǤ ǡ 5 ͳΨͳͻͻͷͶʹΨʹͲͲʹȋǡʹͲͲͺǣʹʹͺȌ ǡ Ǣ Ǥ ǡ ȋ Ȍ ǡͺͲͲͳͻͻͷͷͲͲͲʹͲͲͷǤ ȋ ȌǤ ǡ Ǥ ǡ Ǧ ȋʹͲͲͳǦʹͲͲͷȌǡ ʹͲͲͳǡ ͳͳʹͲͲͲͳʹͲͲͷǡ ǦȋʹͲͲǦͳͲȌǡʹͲͲǡ ʹ͵ ʹͲͲͷ ͵Ͳ ʹͲͳͲǤ Ǧ Ǧ Ǥ ǡ ǡ Ǥ ǡ ǡ ǡ ǡ ǮǯǤ 7TheOutlineoftheEleventhFiveǦYearPlanforNationalEducationDevelopment ȋǣȀȀǤǤǤ Ȁ ȀȀȀȀ̴ͳͺȀʹͲͲͳͲȀʹ͵ǤȌǤ 6 3. EducationalExpansionandtheLabourMarket:Theory Ǥ ȋ Ǯǯ Ȍ Ǥ Ǥ ǣ ǡ ǡǡ Ǥ ǡ Ǥ Ǥ ǡǤ Ǥǡ ǡ Ǥ ǡ Ǥ ǡ Ǥ ǯ ȋ ǡ ǡ ʹͲͲͷȌǤ Ǥ Ǥ Ǥ ǡǮǯ 7 ǡ Ǯ ǯ Ȃ Ȃ Ǥ Ǥ ǡ ǡǯ Ǥ Ǥ ǡ ǡ ǡ Ǥ ȋ Ȍ Ǧ ǡ Ǥ Ǯǯǡ Ǥ Ǥ ǡ ǤǮǯȋ Ȍǡ Ǥ ǡ ǡ ǡ Ǥ 8 Ǧ Ǥ Ǯ Ǧ ǯ ȋȌ ȋǡ ͳͻͻȌǡ ǡ Ǥ ȋȌ Ǥ ǡ ǡ ǡ ǡ Ǥ Ǥ ǯ Ǥ 4. EducationalExpansionandtheLabourMarket:Evidence ȋͳͻȌǤ ͳͻͷͲ ͳͻͲǡ Ǥ ǡ ͳͻͲǤǡ ͳͻͷʹǦͶǡ Ǥ . 9 ȋͳͻͻͲȌ Ǥ ǡ Ǥ Ǯ ǯ Ǧǡ Ǧ ǡ Ǥ ǣ Ǧ Ǥ ǣ ǦͳͻͻͲǦǦ ȋȌ Ǥ Ǥ ȋʹͲͲʹȌ ʹͲͲͲͳͳΨ ͷ͵Ψ ǤǤȋʹͲͲͶȌ Ǧ Ǧ Ǥ Ǧ Ǥ Ǧ ǡǡǡ Ǥ ȋʹͲͲȌ Ǥ ͳͻ Ǯ ǯ Ͷ Ǥ Ǧ ǣ Ǥ ǡ Ǥ ǣ ǡ ǡ ǡ 10 ǡǡ Ǥǯ Ǥ ǡ ǤȋʹͲͳͲȌ ͳΨ ʹͲͲͷ Ǥ ǡ ǡ Ǥ ǤȋʹͲͳʹȌͳͻͺͻǦ ʹͲͲͻǤ Ǧ ǡ Ǥ ȋ Ȍ Ǥ ȋǦȌ Ǧ Ǥ ǡ ǡ Ǥ 5. TheData 11 Ǥ Ǥ ǡ Ǧ ȋȌǣȋʹͲͲʹȌ ʹͲͲ͵ ʹͲͲʹǡ ȋ ʹͲͲȌ ʹͲͲͺʹͲͲǤ ǡ Ȃ ǡ Ǧ Ǥ ȏ ǡ ǡȋʹͲͲȌ ȐǡǡǤ Ǧ Ǧ ǡ Ǥ ǡ ʹͲͲʹ ͳͻͻͻǡ Ǥ ǡ ʹͲͲ ʹͲͲ͵ǦʹͲͲǤ ͳͻͻͺǦʹͲͲʹǤ Ǥ Ǧ ǡ ʹͲͲ ͳͻͻͺǦʹͲͲʹ ʹͲͲʹǡǤǤ Ǧͳͻͻ͵ǦͳͻͻǤǡ ǦǦ Ǥ ʹͲͲʹ ʹͲͲ ȋ ǤǡʹͲͲͻǤǡʹͲͳ͵ǡ 12 ȌǤ ǡ ǡ ʹͲͲʹ ͳʹ ǡ Ͳ ǡ ǡͺͲͲ ʹͲǡͲͲ Ǥ ʹͲͲ ͳ ȋ ͳʹȌǡ ͵ͲͲ ǡ ͳͲǡͲͲͲ ʹͻǡ͵ͲͲ Ǥ ǡ Ǥ Ǥ ǡ Ǥ Ǥ Ǥ Ȃ ǡ ǡ Ǧ ȋ ȌǦ Ǥǡ Ǥǡ Ǥ ǡ hukou ȋ Ȍǡ Ǥ hukou Ǥ Ǧ hukou Ǣ ǡǦ Ǥ ͳǤͻΨ ʹͲͲʹǡͲǤΨǦǡͲǤͶΨ Ǣ Ǧ ʹͲͲ ʹʹǤΨǡ ͳǤΨ ʹǤͳΨ Ǥ ǡ 13 ȋ ǡ ʹͲͲͷǡ Ǥ ͷǦͺȌǤ ǡ hukouǤ ʹͲͲʹ ʹͲͲͺǤ ȋ Ͷ͵ǡͷͲͲ ʹͲͲʹ͵ͻǡͲͲͲʹͲͲͺȌǡ Ǥ Ǥ ǣ ǡ ǡ ǡ ǡ hukou ǡ ǡ ǡ ǡ ǡǡ ǡ ǡǤ ǡǡ ǮǯǤ 6. AnalysisoftheCHIPSurveys ʹͲͲʹ ȋȌ ʹͷΨ ͳ ǤʹͻΨǤ ʹʹǦʹ ͶͻΨ ͳΨ Ǥ ȋ Ǧ Ȍ ͺΨ ͳ͵Ψǡ ʹʹǦʹǡ ͳͺΨ ʹ͵ΨǤ Ǥ 14 ǡ ǦǤ Ǥ ǡ Ǣ ǤǦ ͵͵ΨͶͳΨǡ ͳͲΨͳΨǡ ͶͳΨ͵ΨǤǡ ͲǤͺͳ ͳǤͳͶǡ ǤǤ ͶͲΨǤ Ǥ ȋȌ ȋ ǡ ǡ ǡ Ȍ ʹͲͲʹ ʹͲͲǤ Ǥ ǡ ͲǤ͵ ͲǤ͵Ͷ ȋ ͳΨ Ȍ Ǥ Ǥ ǡ Ǥ ǡ Ǥ Ǥ 15 ǡ Ǥ ǣ ǡ Ǥ ǡ ǡ ǡ Ǥ ǡ ʹͲͲʹʹͲͲ ǣ ͶǤΨ ʹͲͲʹ ǤͲΨ ʹͲͲǤ ǣ ʹǤ ͷǤͲΨǤ ǡ ǡ ǡ Ǥ Ǥ ͳ Ǥ ǯ ǯ Ǧ Ǥ ʹʹǦʹǡȋǦͲǤͲͻȌǤȋΪͲǤʹ͵ȌʹǦ͵ͳ ȋΪͲǤͳͶȌ͵ʹǦ͵ǤʹʹǦʹʹͲͲʹ ʹǦ͵ͳʹͲͲǤȋΪͲǤʹͲȌʹǦ͵ͳ ʹͲͲʹ ͵ʹǦ͵ʹͲͲȋΪͲǤͳͶȌǤ Table 1. The ratio of average hourly wage of higher education graduates to high school leaversbyfiveǦyearagecohort,2002and2007 ʹͲͲʹ ʹͲͲ ʹͲͲʹͲͲʹͲͲʹ ʹͲͲʹ 16 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ ʹʹǦʹ ͳǤͶ ͳǤ͵ ǦͲǤͲͻ ʹǦ͵ͳ ͳǤͶ͵ ͳǤ ͲǤʹ͵ͲǤʹͲ ͵ʹǦ͵ ͳǤͶ͵ ͳǤͷͲǤͳͶ ͲǤͳͶ __________________________________________________________________________ ʹͲͲ ʹͲͲʹǤ Ǥ ȋʹȌǤǦʹʹǦʹͲǤ͵ǡ ʹǦ͵ͳͲǤͳͳ͵ʹǦ͵ͲǤʹͲǤ ʹʹǦʹʹͲͲʹͲǤͲʹʹͲͲǡ ʹǦ͵ͳǡ ͲǤͲͻǤ ǡ ʹͲͲʹ Ǥ Table2.Theratioofaveragehourlywageofuniversitygraduatestohighschoolleaversby fiveǦyearagecohort,2002and2007 ʹͲͲʹ ʹͲͲ ʹͲͲʹͲͲʹͲͲʹ ʹͲͲʹ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ ʹʹǦʹ ͳǤͺͻͳǤͷʹǦͲǤ͵ ʹǦ͵ͳ ͳǤͳǤͺͲǤͳͳǦͲǤͲʹ ͵ʹǦ͵ ͳǤͷͳǤͺͷͲǤʹͲͲǤͲͻ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ Ǥ ǡ ʹͲͲ 17 ʹͲͲʹǡǤ ʹͲͲʹ ʹͲͲ ǡ Ǥ Table3.Percentageunemploymentrateofhighereducationgraduates,university graduatesandhighschoolleaversbyfiveǦyearagecohort,2002and2007 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ ǣ ʹʹǦʹ ʹǦ͵ͳ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ ʹͲͲʹ ͻǤͷ Ǥ ͵ǤͲ ͵Ǥͺ ͳͺǤ ʹǤͶ ʹͲͲ ͳʹǤͶ ͶǤͷ ͻǤͲ ʹǤͶ ͳʹǤͷ ʹǤ ʹͲͲʹͲͲʹ ʹǤͻ ǦʹǤͳ ǤͲ ǦͳǤͶ ͳǤʹ ǦǤʹ ʹͲͲʹͲͲʹ ǦͷǤͲ 18 ǦͲǤ Ǧͳ͵Ǥͻ _____________________________________________________________________ ͵ ȋ ʹʹǦʹȌ ǡ͵ǤͲΨʹͲͲʹͻǤͲΨʹͲͲǤ ǡ ͻǤͷΨ ͳʹǤͶΨ Ǥ ʹͲͲʹ ȋʹǤͶΨȌ ʹͲͲ ȋʹǤΨȌ Ǥ ǡ ʹͲͲʹǡ ͳͻͻͲʹͲͲͲ ǡ ʹͲͲǡ ǡ ǡ Ǥ ǦǦ ǡ cohort aged 22-26 in 2002 than for the cohort that was five Ǥ ǡ ͵ ǣ ʹʹǦʹǡ ǡ ǤͲ ʹǤͻ ǡ ʹǦ͵ͳ Ǥ ǡ Ǥ ǡ ǡǡ Ǯ ǯ Ǥ ȋ Ǯ ǯȌǣ Ǥ 19 Ͷ Ǥ ʹͲͲʹ ʹͲͲ Ǥ ȋǦ ͳͲǤͳ Ȍ ȋǦ͵Ǥ͵ ȌǤ ǡ Ǧ ͳͺǤͻǦͳͷǤͶ ʹʹǦʹʹǦ͵ͳ ǡ Table4.Percentageoccupationaldistributionofhighereducationgraduates,university graduates,andhighschoolleaversbyfiveǦyearagecohort,2002and2007 ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ ǣ ʹʹǦʹ ʹǦ͵ͳ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ Highereducationgraduates ʹͲͲʹ ͶʹǤͳ ͷǤͻ ͵ʹǤͲ ͺǤͲ ͶǤ ͷʹǤ͵ ͷͷǤ Ǧ͵Ǥ͵ ͳͲǤͳ ͵Ǥ͵ ʹͲͲ ͶͶǤͶ ʹͲͲʹͲͲʹ ǦͳͲǤͳ ʹͲͲʹͲͲʹ ʹǤ͵ ǦʹǤ͵ 20 Universitygraduates ʹͲͲʹ ͷͻǤ ͶǤ ͶͲǤͶ ͵ͷǤͶ ͶͳǤͳ ͶͻǤʹ ͷͺǤͻ ͷͲǤͺ ǦͳͷǤͶ ͳͺǤͷ ͳͷǤͶ ʹͲͲ ʹͲͲʹͲͲʹ ǦͳͺǤͷ ʹͲͲʹͲͲʹ ǦͳͲǤͶ ͳͲǤͶ Highschoolleavers ʹͲͲʹ ͺǤ͵ Ǥʹ ͻͳǤ ͻ͵Ǥͺ Ǥ ͳǤ͵ ͻʹǤͶ ͺʹǤ ʹͲͲ ʹͲͲʹͲͲʹ ǦͲǤ ͳͳǤͳ ͲǤ ǦͳͳǤͳ 21 ʹͲͲʹͲͲʹ ͻǤͲ ǦͻǤͲ _______________________________________________________________________ ǮʹͲͲ ʹͲͲʹ ǯ Ǥ ȋʹǤ͵ Ȍ ȋͳͲǤͶ ȌǤͺǤ͵Ψ ʹʹǦʹʹͲͲʹǤǡ ǤΨǡ Ǥ ǡ ǡ ǡʹͲͲʹǦ ʹͲͲǡǡ ǡ Ǥ ǡ ǣ Ǥ 7. TheCHIPSurveysandtheQualityofEducation Ǥǡǡ ǡ ǡ Ǥ ǡ Ǥ ǡȋǡǮǯȌ 22 ͳͺǦǦ Ǥ Ǥ ǡ ǡ Ǥ Ǥ Ǥ Table5.Quintileperformanceinsecondaryschool:percentagedistributionsandwage coefficients ____________________________________________________________________________________________________ Highereducationgraduates ʹͲͲʹ ͳͺ ͲǤͳͶȗȗȗ ʹͲͲ ʹͶ ͲǤͳ͵ȗȗȗ ʹʹǦʹ ʹͲͲ ʹͲ ͲǤͳͻͺȗȗ ʹͲͲ ͳͻ ͲǤͳͻȗȗȗ Universitygraduates ʹͲͲʹ ͶͶ ͲǤͳͲͺȗȗ ʹͲͲ ͵ʹ ͲǤͲͻȗȗ ͵ͻ ͲǤ͵ͳͻȗȗ ʹʹǦʹ ʹͲͲʹ 23 ʹͲͲ ͵ͳ ͲǤʹͷͷȗȗȗ ʹͲͲʹ ͳͲ ͲǤͳͶȗȗȗ ʹͲͲ ͳͳ ͲǤͲ ʹʹǦʹ ʹͲͲʹ ͲǤʹʹͺ ʹͲͲ ͺ ͲǤͲͶͺ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ ǣ Ǥȗȗȗǡ ȗȗǡȗ ͳΨǡͷΨǡͳͲΨ Ǥ ʹͲͲʹʹͺΨ ǡͶͶΨǡͳͲΨ Ǥ ʹͲͲʹǦʹͲͲǣ ͶΨͳʹΨ ǡ Ǥ ǡ Ǥ ʹǦͷ ǡ ͳ ȋͷȌǤ ȋ Ȍ Ǥ ǡ ǡ ǡ ǡ ǡǡ Ǥ ǡ Ǧ 24 ʹʹǦʹǡ ȋ ȌǤ ͺ Ǥ ǡ ǡ Ǥ Ǥ Ǥǡǡ Ǥ Table6.Thewagecoefficientofhighereducationgraduatesanduniversitygraduates, withandwithoutstandardisationforquintileperformanceatschool,2002and2007 ___________________________________________________________________________ ʹͲͲʹʹͲͲ Sampleofhighereducationgraduatesandhighschoolleavers ͲǤ͵͵ȗȗȗ ͲǤ͵ͶͶȗȗȗ ͲǤ͵͵Ͳȗȗȗ ͲǤʹͻʹȗȗȗ ͲǤ͵Ͷȗȗȗ ͲǤ͵Ͷʹȗȗȗ ͲǤ͵ͶͶȗȗȗ ʹʹǦʹ ͲǤʹͺȗȗȗ Sampleofuniversitygraduatesandhighschoolleavers 25 ͲǤͷͷȗȗȗ ͲǤͷͳͻȗȗȗ ͲǤͶͷͺȗȗȗ ͲǤͷ͵ȗȗȗ ͲǤͶͻͶȗȗȗ ͲǤͶͺȗȗȗ ͲǤͶȗȗȗ ʹʹǦʹ ͲǤͶͺȗȗȗ ȋ ȌʹͲͲʹʹͲͲǤ Ǥ ǡ Ǥ ʹͲͲ ʹͲͲʹǡ ǡ ǣ ʹʹǦʹǤǡ ȋ Ȍ Ǥ ǡ Ǥ Ȃ Ȃ ǡʹͲͲʹǡ ǡ Ǥ ʹͲͲ ǡ ʹͲͲʹ Ǯǯ ǡ Ǯǯ ȋ ǡ ͳ ͵ ȌǤ 26 ȋ Ȍ ȋͲǤͳͲʹȗȗȗȌ ȋͲǤͳ͵͵ȗȗȗȌǤ Ǥ ǯ ʹͲͲʹ ȋǦͲǤͳʹʹȗȗȌǤ Unfortunately it was not possible to test the hypothesis that the rank of university attended had a greater effect on the wages of university graduates in 2007, after the great expansion of university education required employers to be more selective in their recruitment and remuneration policies. The 2007 CHIP survey contained some information that the 2002 survey lacked, in particular the gaokao score (crucial to the admission to institutions of higher education and their quality). It is not sensible to calculate measures of central tendency and dispersion of the gaokao score because the gaokao scoring system varied across years and provinces. The gaokao score can affect wages because it is a measure of individual ability and achievement (if it is known by employers) or a proxy for these productive qualities (if it is not known by employers). The gaokao score can also raise wages because it provides access to good institutions of higher education and so contributes to the amount of human capital acquired. The pure gaokao score is relevant if the effect on wages operates through individual qualities, but the gaokao score conditioned on province and year (so correcting for different admissions criteria) is relevant if the effect on wages operates through access to good institutions. Table 7 reports the conditional effect of the gaokao score on wages. One point more in the gaokao score raised the wages of higher education graduates by a statistically significant amount and of university graduates by almost the same amount. Examining the group aged 22-26, it is notable that each significant coefficient on gaokao is higher for the entry cohort than for employees as a whole. This is consistent with the notion that individual ability and 27 human capital acquired in university or college are becoming more important in wage setting given the much enlarged field of young graduates. It is unfortunate that we cannot directly test the gaokao Ǥ gaokao ǡ ǡ gaokaoǤ gaokao Ǥ Table7.Coefficientsongaokaoscorewithandwithoutstandardisationforprovinceand year of test; coefficients on higher education and on university education in wage functions for samples of higher education plus high school education and of university educationplushighschooleducation,withandwithoutstandardisationforgaokaoscore, 2007 ___________________________________________________________________________________________________ ǦʹʹǦʹ ̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴̴ Samplesbyeducationallevel gaokao ǣ Standardisingforprovinceandyearoftest ͲǤͲͲͳͷȗȗȗ ͲǤͲͲͳͻȗȗȗ ͲǤͲͲͳͶȗȗȗ ͲǤͲͲʹȗȗȗ Notstandardisingforprovinceandyearoftest ͲǤͲͲͳ͵ȗȗȗ ͲǤͲͲͳͶȗȗȗ ͲǤͲͲͳ͵ȗȗȗ ͲǤͲͲͳͻȗȗȗ Sampleofhighereducationgraduatesandhighschoolgraduates ǣ Withgaokaovariable 28 ͲǤʹ͵ͺȗȗȗ ͲǤͶͲ͵ȗȗȗ Gaokao ͲǤͲͲͳͶȗȗȗ ͲǤͲͳͻȗȗȗ ͲǤ͵ͶͶȗȗȗ ͲǤͷ͵ȗȗȗ Withoutgaokaovariable Sampleofuniversityeducationandhighschoolgraduates Withgaokaovariable ͲǤ͵͵Ͷȗȗȗ ͲǤͷͲ͵ȗȗȗ Gaokao ͲǤͲͲͳͶȗȗȗ ͲǤͲͲͳͻȗȗȗ ͲǤͶȗȗȗ ͲǤͶͻͷȗȗȗ Withoutgaokaovariable __________________________________________________________________________ ǣ ȗȗȗǡ ȗȗǡ ȗ ͳǡ ͷ ͳͲΨ Ǥ ͷǤ gaokao ȋ Ȍ ʹͲͲǤ gaokaoǤ gaokao ͵ͲΨ ͶͲΨ Ǥ ʹͲͲ gaokao ǡ ǡ Ǥ ǦʹʹǦʹǤ gaokao Ǥ Ǥ 29 ͺ Ǥ Ǥ ǡʹͲͲʹ Ǥǡ ʹͲͲ ͳʹ ͵Ǥ ʹͲͲʹǡ Table 8. Wage premium on higher education for sample of higher education graduates and high school leavers. and on university education for sample of university graduates andhighschoolleavers,byperformancequintile,2002and2007 ʹͲͲʹ ʹͲͲ Sampleofhighereducationgraduatesandhighschoolleavers Highereducationgraduatecoefficient ͳʹ ͲǤ͵͵ȗȗȗ ͲǤ͵ͺ͵ȗȗȗ ͵ ͲǤ͵͵ͻȗȗȗ ͲǤʹͲ͵ȗȗȗ ǦʹʹǦʹ ͳʹ ͲǤʹͳȗȗȗ ͲǤ͵Ͳͷȗȗȗ ͵ ͲǤ͵͵Ͷȗȗȗ ͲǤͶͲͶȗȗȗ Sampleofuniversitygraduatesandhighschoolleavers Universitygraduatecoefficient ͳʹ ͲǤͷͳ͵ȗȗȗ ͲǤͶͻȗȗȗ ͵ ͲǤͷͳͶȗȗȗ ͲǤʹͻͷȗȗȗ ǦʹʹǦʹ 30 ͳʹ ͲǤͶͲȗȗȗ ͲǤͶͺȗȗȗ ͵ ͲǤͶͲͳȗȗ ͲǤͷͲͶȗȗȗ ǣ ͶͷǤ ʹͲͲǡ Ǥ ǡǡǤ ǡ Ǥ ǡ Ǧ ʹʹǦʹǡ Ǥ ʹͲͲʹʹͲͲǤǡ ͵ͳʹǤ ǡ͵ǡ Ǥ 8. AnalysisoftheNBSSurveys Ȃ ͷǦ ʹͲͲʹǦʹͲͲͺǤ Ǥ Ǥ ȋ Ȍ ʹʹǤ ǡ ǡ ǣǡǡ ǮǯǤ Ǥǡ 31 Ǯ Ǧ Ǧǯ ǡ Ǥ ȋȌ Ǥ Ǥ ǡ ͳͳǤͺΨʹͲͲʹͷǤͺΨʹͲͲͺǤǡͻͳΨ ʹͲͲ ʹͲͲǤ ǡ ʹͶǤͲΨʹͲͲʹ͵ͷǤͳΨʹͲͲͺǡͷΨ ʹͲͲʹͲͲǤ ǡ Ǥ ǡ Ǥ ǡ ʹͲͲʹǦʹͲͲǡ ʹͲͲʹͲͲͺǤ 8.1 Theeffectonwages ǤǮ ǯ Ǥʹǡ Ǥ ǡʹͲͲ͵ǡʹͲͲͷ ʹͲͲ ʹͲͲ ʹͲͲͺ Ǥ ʹͲͲ͵ ʹ͵ʹͶʹͲͲͶ ʹ͵Ǥ ʹͲͲ͵ǡ ʹͶ Ǥ ǡ Ǥ ǡ 32 Ȃ Ǥ ǡ Ǥ ʹͲͲʹʹͲͲͺǡͳͲǤͷ 5000 Real earnings 10000 15000 20000 Figure2.Realearningsofhighereducationgraduatesbyageforeachentrycohort 2002 2004 2006 2008 Entry year Age 22 Age 24 Age 26 Age 28 Age 23 Age 25 Age 27 Ǥ ǣ ǡ 33 ʹͲͲͻ ȋ Ǥǡ ʹͲͳʹȌǢ Ǣ ǡ ǡ Ǥ ǡ Ǥ Ǥ ʹͲͲʹ Ǧ ȋ Ȍǡ Ǥ ǡ Ǣ ǡ Ǥ Figure 3. Relative real earnings of higher education graduates, deflated by the real earningsofallemployees,byageforeachentrycohort 34 20000 Relative earnings 10000 15000 5000 2002 2004 2006 2008 Entry year Age 22 Age 24 Age 26 Age 28 Age 23 Age 25 Age 27 ͵ Ǥǡǡ Ǥ ǣ ʹͲͲͺ ͵Ψ ʹͲͲʹǡ ͺͻΨ ʹͲͲʹͲͲʹǤ ǡ ȋ Ȍ Ǥǡ Ǥ Ǥ 8.2 Theeffectonunemployment ͳͷ ǣǡ ǡ Ǥ 35 ǦǤ ǡ Ǥ Ͷ Ǥ ǡ ʹʹǦǦʹͲͲʹʹͻΨǤ ʹͲͲͶǡ ʹͲͲʹǡͳͺΨʹͶ ͻΨʹǤʹͲͲ͵ǡͳͻΨ ʹʹ ͳʹΨ ʹͷǤ ǡ Ǥ ʹʹǦǦǡ ǤǤ Ǥ ʹʹ Ǧ ʹ͵ Ǧ ʹͲͲʹ ʹͲͲͶǤ ǡ ʹͲͲͶǤ Ǧ Ǧ Ǥ Ǥ ʹͲͲʹǦʹͲͲǡ Ǥ Figure4.Highereducationgraduates:unemploymentbyageforeachentrycohort 36 8.3Theeffectongoodjobs ǤȂ ǡ Ǧ Ǯ ǯǤ Ǥ ͷ ǤʹʹǦǦʹͲͲʹ ʹͲͲ͵ǡ͵ͳΨʹʹΨǡǡ ʹͺΨʹͲͲ Ǥǡ ʹ͵Ǧ ʹͲͲ͵Ǥ Ǥ 37 Figure 5. Higher education graduates: proportion in good jobs by age for each entry cohort ʹͲͲʹ ǡ ǡ͵ͳΨ ʹʹ͵ͻΨʹͶͶʹΨʹǤʹͲͲ͵ Ǥ ǡ Ǥ Ǥ ǣ ʹͲͲʹʹͲͲǡǤ ǫ Ǧ Ǯǯ ʹͲͲʹʹͲͲǡͶʹΨ 38 ͵ʹΨǤ ǡ ʹͲͲͶǤǤ ǡ ǡǡ Ǥ Ǯǯǡ Ǥ͵͵ΨʹͲͲʹ ʹͻΨ ʹͲͲǤǡ ǡ Ǥ 9. 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