Dynamics of rate of returns for postgraduate education in Taiwan: The impact of higher education expansion

Chih Hai Yang, Chun Hung A. Lin, Chien Ru Lin

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


This paper analyzes the dynamics of rate of returns for postgraduate education and the determinants of wage premiums for postgraduate labor, especially for the impact of higher education expansions, in terms of quantity and quality, since the late 1990s in Taiwan. Utilizing quasi-panel data over the 1990-2004 period and employing the double fixed effect model, the empirical results first confirm the existence of wage premiums for workers with postgraduate degrees. However, the analysis on the dynamics of wage premiums finds that it ranged from only 1.40 to 11.67% and decreased sharply in 2004, indicating that the pecuniary reward for postgraduate qualification seems not to be as high as expected. Along with the rapid expansion of higher education, the concern about its negative impact on rate of returns to education is witnessed in this study. The sharp increase in the supply of postgraduate labors appears to have a negative impact on an individual's wage premium. Similarly, a decline in the postgraduate labor quality along with higher education expansion has contributed to a negative wage effect.

Original languageEnglish
Pages (from-to)359-371
Number of pages13
JournalAsia Pacific Education Review
Issue number3
StatePublished - Sep 2011


  • Higher education expansion
  • Postgraduate education
  • Wage premium


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