Research On The Economic And Entrepreneurial Effect Of Chinese Higher Education Expansion

From the late 1950 s and the early 60 s,the process of higer education massification has been promoted all over the world due to the growing demand for high-tech skilled workers.Since then,higer education has been paid increasing attention to while it has finally transferred into massification from elitism as a history trend.In 1997,the Southeasten Asian financial crisis broke out thereby affecting Chinese domestic market with emerging supply shortage and inflation.With regard to these problems,Chinese government had carried out a stunning higher education expansion(HEE)in 1999.After HHE,surging university graduates pouring into labor market,which injected much great power to Chinese macroeconomy.There is no denying that HHE in 1999 is a major event in Chinese higher education reform history and the following two decades are the prime time of Chinese economic growth.However,when loads of graduates competing for the job vacancy,the rate of social unemployment was also climbing.Theoretical speaking,HHE has not only provided substantial labor force pushing economic growth in terms of education quantity but improved worker’s comprehensive capabilities with an awareness of self-employment and job-hunting choice which impelled more entrepreneurial activities n terms of education quality.Currently,China is in the crucial period of the transformation and upgrading,changes of society has been occurred frequently while the social employment is still grim.It is a common fact that every year we can hear about voice like “the most difficult job-hunting season”,“graduation equals unemployment” or “would rather self-employed than working for others”.Quite a few of us attribute HHE as the reason for this as it may potentially give rise to the massification of the skilled and the over-education.So,is HHE the real reason to be blamed? I reckon that we should have a deeper and better unstanding of the policy effect of HHE when doing so.Therefore,this research aims to study the real policy effect of China’s HHE in 1999,particularly the economic and entrepreneurial effect.By strictly define the related academic concepts like higher education,higher education expansion,this research has a further clearification of the topics and policy effects needed to be estimated.Using classical analysis framework of human capital theory and difference –in-difference(DID)econometrical method,this research then establish the theoretical model with an advancement in experience model combining both the stratification theory and the specific research background.Based on this,this research has also retrospected the specific economic history and policy system,especially the economic and entrepreneurial effect of Chinese HHE in 1999.The result of theoretical analysis is that Chinese HHE in 1999 has strong political color,which belongs to our country’s positive fiscal policy named "boost domestic demand,stimulate consumption".The strength and scale of this HHE are even impressive all over the world.Due to the fact that HHE has been existed nearly two decades,long-term economic effect has become to emerge.Therefore,this research use macro panel data from 30 Chinese provinces in 1999-2013 aiming to tackle the problems we metioned above.Following the thought of effect decomposition,this research has decomposed the policy effect of the Chineses HHE in 1999 into extensive-quantitaty and intensive-quality effect to estimate the economic effect of expansion;Using the idea of "control-intervene",this research has estimated the entrepreneurial effect of HHE regarding it as a quansi-natural experiment.The empirical research found that:First of all,HHE is a effectly pivotal policy to boost macroeconomy as it has boosted technology innovation,optimized human capital and alleviated employment pressure during the transition period.By strongly supply the higher quality labor force,Chinese HHEachieve the growth of macroeconomy and entrepreneurship.Second,results of fixed effects regression and IV estimation in static and dynamic panel data regression model show that HHE has significantly promoted the macroeconomic growth,1% of HHE equals 0.158% increase of GDP.However,the instensive-quality effect of HHE is significantly negative,reflecting the a decline in the education quality;the results of DID show that HHE has significantly promoted entrepreneurship,each additional unit of HHE increases 2.4% of the later one.At the same time,extensive-quantity effect has played the major role wihle intensive-quality effect has a greater potential and will be more import to the macroeconomic growth.Next,the HHE policy has obvious regional heterogenity,it has significantly promoted the economic growth in eastern China while the decline of education quality has affected the regional economic growth in the middle and western part.Such phenomenon reflects that the next step of reform in higher education should focus on education quality in the mid and western part,aiming to make the bonus of HHE shared equally by all Chinese citizens.In general,in order to achieve the new growth of China’s macro economy during current transformation and upgrading period,it is much needed to deepen continueous reform of education,transfor the pattern of higher education development and pay attention to the education quality in a intensive way.The theoretical analysis of economic and entrepreneurial effect of HHE has enriched the relative methodologies in terms of policy effect of HHE.In addition,the conclusion of this research could be an important guideline for in Chinese higher education reform and economic development in the future.