The Economic Impact Of Tertiary School Enrolment Enlargement

The development of tertiary school is an important part of the development of a country. The number of enrolment has sharply increased since 1999, when the tertiary school enrolment enlargement policy was carried out. The enrollment number of tertiary school had reach to 5.3 million, or five times as large as the number in 1998. The enlargement of tertiary school meets the people's needs for higher education, and lots of talented persons are brought up as well. In this way, the enlargement of tertiary school benefits the development of economy and society.Moreover, the quick development helps to accumulate a great amount of human capital for the society, which are the solid foundation of long-run economy growth. At the same time, since the expend of higher education increased greatly, the domestic demand was also boosted, therefore the economy grew faster even in the short-run. However, On the other hand, some negative effects inevitably companied with the enrolment enlargement, such as restrained individual consumption, serious unemployment of university graduates and the lower quality of tertiary school education.In order to find the long-run impact of the higher education enlargement quantitively, a simple endogenous growth model with the ratio of population having received higher education is built. The model uses Romer (1990)'s model as a basic frame, and takes both of enrolment enlargement's advantages and disadvantages into consideration. Then the steady solution of the model is solved, and the model is modified after considering graduates'unemployment as well.The empirical study is carried out in two different ways. At first, a regression model is built to test the quality results of the basic model. Thereafter, China's ratio of population having received higher education in steady state is calculated.The last part of this paper is the conclusion and some corresponding policy suggestions for higher education development in the future.