TY - JOUR
T1 - Rigid low college premiums and the expansion of higher education in Taiwan
AU - Huang, Li Hsuan
AU - Huang, Hsin Yi
N1 - Publisher Copyright:
© 2015 World Scientific Publishing Company.
PY - 2015/9/23
Y1 - 2015/9/23
N2 - The rapid expansion of higher education in the late 1980s in Taiwan has resulted in a swift increase in the supply of highly-educated workers in the labor market. This research differs from past studies in that it analyzes the effect of the rapid expansion in higher education in Taiwan with emphasis on the cohort effect, specifically examining the effect of changes both in intra-cohort relative supply and the aggregate relative supply on college returns. Besides, when estimating the aggregate relative supply of college graduates, this study takes into account the substitutability between younger and older educated workers. We present evidence that the expansion policy has significantly depressed college premiums for workers of all ages, but the adverse effect is particularly concentrated among the younger cohorts. Furthermore, we found the elasticity of substitution between college and high school graduates to be 3-4 times higher than in developed countries. We also found the important role played by the demand side, likely linked to technological progress and changes in export structure toward the more technologically intensive. As a consequence, the expansion of higher education and increase in the relative demand for higher-educated workers, along with high elasticity of substitution between college and high school graduates, led to the rigid low college premiums.
AB - The rapid expansion of higher education in the late 1980s in Taiwan has resulted in a swift increase in the supply of highly-educated workers in the labor market. This research differs from past studies in that it analyzes the effect of the rapid expansion in higher education in Taiwan with emphasis on the cohort effect, specifically examining the effect of changes both in intra-cohort relative supply and the aggregate relative supply on college returns. Besides, when estimating the aggregate relative supply of college graduates, this study takes into account the substitutability between younger and older educated workers. We present evidence that the expansion policy has significantly depressed college premiums for workers of all ages, but the adverse effect is particularly concentrated among the younger cohorts. Furthermore, we found the elasticity of substitution between college and high school graduates to be 3-4 times higher than in developed countries. We also found the important role played by the demand side, likely linked to technological progress and changes in export structure toward the more technologically intensive. As a consequence, the expansion of higher education and increase in the relative demand for higher-educated workers, along with high elasticity of substitution between college and high school graduates, led to the rigid low college premiums.
KW - Education
KW - Taiwan
KW - higher education expansion
KW - stagnant college wage premium
UR - http://www.scopus.com/inward/record.url?scp=84942197531&partnerID=8YFLogxK
U2 - 10.1142/S0217590815500228
DO - 10.1142/S0217590815500228
M3 - 期刊論文
AN - SCOPUS:84942197531
SN - 0217-5908
VL - 60
JO - Singapore Economic Review
JF - Singapore Economic Review
IS - 4
M1 - 1550022
ER -