Bigger Pie, Bigger Slice? The Impact of Higher Education Expansion on Educational Opportunities in China

• In Event: 61.055 - Inequality in Educational Opportunities: Evidence From China

Abstract

Higher education has been recognized as key to stimulating economic development because it prepares the stock of human capital for technological innovation and transformation and plays other roles in economic growth. To meet the needs of the information economy, China has to develop more talent through education . China started to expand the scale of higher education in 1999: 845 new general higher education institutions were built between 1998 and 2006, which is about an 82.7% increase from 1998. The system created more than 10 million new student spots from 1998 to 2006 to accommodate youth eager for higher education, which brought the country’s gross enrollment ratio to 22% in 2006. Despite the substantial increase in the supply of college graduates, returns to higher education are still very high, and demand for higher education continues to increase because going to college is a major channel to obtain higher social status and better welfare in China. Whereas the central government used to subsidize higher education before the 1999 higher education expansion reform, the new policy environment and higher education system have created a cost-sharing system, where individuals need to pay tuition fees when enrolling in a university. Consequently, the new opportunities and benefits might not transfer fully to students if they cannot afford the costs associated with going to college.

Although a number of researchers have analyzed the determinants of the demands for higher education and have documented the trend of unequal access to college in China, little attention has been given to the role of supply factors on educational attainment. Empirical evidence on the causal effect of higher education expansion is even sparser. To the best of our knowledge, our study is the first to examine the impact of different levels of higher-education supply expansion on students’ access to and attainment in universities in China. In particular, using the largest and latest household survey in China, the China Family Panel Survey, and a quasi-experimental methodology proposed by Duflo (2001), we exploit the variation in the number of increased university spots across provinces and years from 1999 to 2006 to examine how individuals with different family or socioeconomic backgrounds are affected by the expansion in terms of higher education access and attainment. Even after we control for the increase in tuition fees and disposable family income at the provincial level, the changes in the provincial increase in university spots do not seem to have any statistically significant impact on students from lower socioeconomic backgrounds. Instead, we find consistent, statistically significant impacts on students from well-off families in terms of probability of college access and attainment. The results imply that inequality is increasing in higher educational access and attainment for both second-tier and first-tier institutions in China and that the extent to which higher education expansion reaches disadvantaged students is limited. We argue that it is possible that students with less social-cultural capital do not have access to sufficient information about their education options or financial assistance to facilitate their university study.

Authors

• Dongshu Ou, Chinese University of Hong Kong

• Yuna Hou, Chinese University of Hong Kong