Rising Class Inequality of Higher Education in China: Industrialization, Educational Expansion, or Labor Market Incentive?

Jin Jiang, Hong Kong Institute of Education
Tony Tam, Chinese University of Hong Kong

This study examines three possible causes of rising class inequality in college attendance: industrialization, educational expansion, and labor market incentives as drivers for the competition for college. The industrialization hypothesis emphasizes the public’s increase in preference for more education. The educational expansion hypothesis underscores two consequences of the same demographic process—growing size of the competition pool for college admissions, and the decreasing scarcity of educational qualification arising from the expansion. The market incentive hypothesis stresses that competition intensifies with a rising college earnings premium. Drawing on the 2006 Chinese General Social Survey and macro statistics on 405 province-by-year units, our analysis produces three central findings: (1) Labor market incentive but not industrialization nor expansion hypothesis explains the rising inequality. (2) Class-differentiated family investments in education widen the class divide in a unidimensional contest for college admission. (3) Rising market incentives intensify class adaptation by the time compulsory education ends.