Higher education planning and the wages of workers with higher education in Taiwan

A significant feature of Taiwan's educational development is the high degree to which the structure of educational expansion, especially in higher education, has been strictly planned by the government. The Ministry of Education controls the number of students who are allowed to attend all institutions of higher education (both private and public). We present evidence that this control over the relative supply of workers with higher education, rather than changes in relative demand for these workers, was the more important factor causing changes in the relative wages of Taiwanese workers with higher education between 1978 and 1995. For example, decisions by education planners in the 1980s to increase the number of students enrolled in universities and junior colleges led to a fall in the wages of workers with higher education relative to the wages of workers without higher education.