The impact of college enrollment expansion policy on income gap: a case study from China

Abstract

This study focuses on the empirical research on the impact of college enrollment expansion policy on the income gap of residents. In this paper, the distribution characteristics of the sample survey data of residents’ income before and after the college enrollment expansion policy (1989–2015) in China Health and Nutrition Survey Database (CHNS) are firstly investigated. And the counterfactual analysis of the income gap of residents before and after the college enrollment expansion policy is conducted by using Recentered Influence Function (RIF) regression modeling and Firpo Fortin Lemieux (2009) (FFL) decomposition method respectively. The results show that: (1) The income gap of residents before and after the college enrollment expansion policy is the result of the combined effect of the “effect of returns to education” and the “effect of labor structure”. The “effect of returns to education” widens the income gap, while the “effect of labor structure” narrows the income gap; (2) The returns to education of urban residents under the college enrollment expansion policy is significantly higher than that of rural residents, resulting in the widening income gap among residents; (3) There is gender discrimination in the labor market. Women’s education opportunities have increased after the college enrollment expansion policy, however, the returns to education of female residents is still lower than that of male residents. Based on the empirical test results, relevant policies and suggestions are proposed from the perspective of educational development.