| Higher education in the Untied States experienced rapid development to promote economic development after the World War Ⅱ. With the rapid economic development of the United States, people who have a higher education certificate received good salaries and gained high social status. Higher education has attracted a widely public attention for its effects on economic growth, social development and individual income. Human capital theory that formed at the late 1950s and early 1960s explained this phenomenon. The theory views the people as a form of capital and argues that people is an important factor of social production. People could transfer their knowledge, skills and abilities into contribution to productivity through participating in social production.Human capital theory views manpower as the most important capital form. It states that education, especially higher education, is the best investment both for individual and the society. After World War Ⅱ, the prosperity of capitalism seems to provide proof for the human capital theory. Under the guidance of this theory, the United States and other Western countries targeted the development of higher education. Thus, in the 1950s and 1960s, higher education in the United States and other Western countries experienced rapid expansion. However, in the 1970s, with the end of the golden age of capitalist development, human capital theory has been challenged, and the huge expansion of higher education also stagnated. After the 1980s, with the rise of the third technological revolution, the United States took the lead into the so-called knowledge economy era. Due to the increasing important role of knowledge in the production process and social life, human capital theory has rise again. The new human capital theory states that in the knowledge economy era, because knowledge becomes the foundation and center of the entire production activities, higher education become more important. Higher education not only brings good jobs and high income to individuals, but also promotes the country’s economic growth and the country’s competitive advantage. Under the guidance of the new theory, higher education becomes the focus of individuals and the nation again. People hopes to finding a decent job and receiving an attractive income through attending higher education, while the nation treats the development of higher education as a the basic national policy of economic growth, social development. Whether individuals or the nation invests enormous sums of money in higher education. Higher education not only become a critical juncture for college students to enter the society, but also become the most important work of the government in many countries. However, is higher education really so amazing that could both achieve personal wealth and promote social progress and national prosperity?The answer is more complex than imagine. In the knowledge economy, attending higher education a necessary condition for people to find a good job and obtain a high income, but not a sufficient condition. In fact, with the popularity of higher education and the expansion of universities, a growing number of university graduates find that they cannot find a job to match with its education in the labor market. Unemployment has become a harsh reality for college graduates. This not only formed a huge pressure for young people, but also leads to serious social tensions. The "Occupy Wall Street" that outbreak at 2012 is a reflection of this social tension. What reasons that caused the failure of human capital theory? Specifically, why is there such a large gap between returns expected by human capital theory and the reality produced by higher education? What impacts this gap brings about in the United States? What inspirations American experience provides for our country? This is the issue this thesis attempts to explore.In addition to the introduction and conclusion, the thesis consists of six chapters.In the introduction, the research theme on returns of American higher education is established, and then the theoretical and practical significance of this study is discussed. After that, based on the literature review, a research path is clarified when the methodology is selected. Finally, the thesis constructs an analysis framework for returns of American higher education.Chapter One:Reviewing the formation and development of human capital theory. As a continuation and development of knowledge and skills, Education’s importance for social production and the whole of social life has long been recognized. However, until the Second World War, in the West and in the world, higher education is elitist education, and the university actually like the "ivory tower" for ordinary people. After the World War Ⅱ, Western capitalism entered the golden age of development, and the economies of many countries have experienced unprecedented growth. The human capital theory emerged in order to explain this so-called "mystery of economic growth". Under the guidance of this theory, higher education in Western countries, especially in the United States obtained a fast development, and American higher education was the first to complete the transform from elite education to mass education.Chapter Two:Introducing the prediction of human capital theory to returns of higher education in the knowledge economy. After the 1970s, when the golden age of capitalist development ended, human capital theory was challenged. However, in the 1980s and early 1990s, when the third technological revolution emerged, the United States as the representative of Western countries have entered the era of knowledge economy. Knowledge economy provides a new development opportunity for the human capital theory and higher education. Since knowledge has become the core and foundation of many emerging industries in the era of knowledge economy, the status and role of higher education is increasingly prominent. Based on this point, the human capital theorists have done a very optimistic forecast on returns of higher education investment in the knowledge economy. They believe that in the era of knowledge economy, higher education not only brings good jobs and high incomes to individuals, but also accelerates social mobility and promotes the prosperity of the entire national economy. Under the guidance of this theory, higher education in the United States set off another expansion climax. Since the late 1990s, every US president has clearly declared to be an "education president."Chapter Three:Analyzing the current situation of returns of higher education in the United States. Large amounts of data and statistics show that in the United States, real returns which higher education brings both at the individual level, the social level or national level are much lower than the prediction of human capital theory.The returns gap of American higher education is pointed out through the theoretical and practical analysis in the above three chapters. In the following three chapters, based on individual level of higher education returns, the analysis on reasons for the returns gap of American higher education is implemented from three aspects of higher education, labor market and social class.Chapter Four:Analyzing the surplus of American college graduates and investigating the supply side reason for low returns to higher education investment. As an independent system, higher education consists of its scale, quality and structure. Since the 1980s, due to the requirements of the knowledge economy and optimistic forecasts human capital theory for returns, as well as solving domestic social contradictions and participating in international competition, the government has promoted a large-scale expansion of the US higher education. When more and more people attend higher education, the number of higher education qualifications is increasing so rapidly that there is a huge expansion of high-educated labor force in American labor market. But decline in the quality of college graduates and structural imbalances of college graduates have also emerged. Meanwhile, the expansion of global higher education, especially higher education expansion in developing countries, prompts the decline of American workers’competitiveness and exacerbates the intense competition on knowledge works in the US. Overall, in the knowledge economy the expansion of higher education provides a lot of knowledge labor supplies for the labor market, and then increased intense competition on knowledge jobs. More high-skilled and low-wage labors from developing countries enter American labor market and occupy the knowledge jobs making competition more intense among knowledge workers.Chapter Five:Analyzing the insufficient demand for American college graduates and investigating the demand side reason for low returns of higher education investment. As higher education, the labor market has a relative independence, thus it has its own requirements on the size, quality and structure of the labor force. Human capital theory predicts that in the knowledge economy, when the social production of knowledge has become the center, knowledge jobs would due a spurt of growth. In order to hold the dominance of knowledge production and make profit maximization, the entrepreneurs motivates the reform of American labor market under the background of knowledge’s digitalization and production’s standardization. When some types of jobs, such as management positions, repetitive jobs, full-time jobs and human-skilled jobs declined, the number of jobs in the labor market for knowledge workers is also significantly reduced. Meanwhile, a global high-skilled and low-cost labor market emerges, which caused a large number of highly skilled knowledge jobs being moved to developing countries. These have exacerbated the competition on knowledge jobs in the United States. Therefore, the US labor market shows a total lack of demand on knowledge workers and structural differentiation of demand on different knowledge workers, which is contrast to the huge supply of knowledge workers.Chapter Six:A further theoretical explanation on he gap between real returns of American higher education and the expected by human capital theory. There is another deeper reason for the returns gap that social classes participate in the whole conversion process from "school" to "work". When economic prosperity, the labor market can accept enough knowledge labor, so that the unfair competition caused by social classes participation could be often hidden or ignored. But when the labor market is shrinking, it could not provide a lot of knowledge works, the competition on knowledge jobs becomes more intense. A college degree is no longer the only condition to get a good job, but social class determines good and high-wage jobs. However, when the majorities who expect to change their own destiny through higher education have to face with the fact that social classes cannot be changed and that they only could gain low returns from their college degrees, social conflict would be occur.Conclusion:Analyzing on the impacts and consequences of the returns gap at individuals, the society and the nation levels to higher education. Knowledge unemployment knowledge not only causes the debt burden living embarrassment to poor students and families, but also changes their educational investment behaviors which leading to increasing number of poor children dropping out of university education, or students taking extreme "adverse selection" behavior. There is a "winner takes all" game emerging in the US higher education system and labor market. The elitist control of high-quality education resources and quality of jobs is shaping a "winner takes all" society. This social rule compresses the opportunity of the bottom of American society for upward mobility, so that American middle class is declined. At the same time, the returns gap broke the highly educated and high-wage chain, which results in the failure of the US magnetic economic system and causes the relative decline in the US innovation-based competitiveness.Finally, based on the US research, this thesis also discusses the enlightenments of the returns gap to American higher education to China. In China, there have been similar problems, including graduates unemployment and over-educated phenomenon. However, unlike the United States, there is not an absolute surplus of knowledge labors in China. China is in a transition from a huge manufacturing country to innovative country, and the country is still in the process of catching up the US and European countries. These demand sufficient talent pools and adequate investment in human capital. Of course, we still have to deal with a series of serious problems caused by the returns of higher education. The government should create enough jobs to knowledge workers, when it builds an army of highly skilled, well-trained workforce. |
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