Comment on “What Can Students Gain from China's Higher Education?”

Over the past four decades, China has built up one of the largest higher education systems in the world which is no small achievement. The Chinese higher education system is very diverse and complex, and varies a great deal in terms of ease of access for students, the quality of teaching and research, and the returns to education. Therefore, summarizing its progress or the lack of it is a daunting task. Li et al. (2023) offer fresh findings on the returns to higher education in China and their determinants. Their main conclusions are that the returns to college education in China have stabilized after a significant rise and the relatively high returns are largely explained away by signaling and social networks channels as opposed to the human capital mechanism. However, Li et al. (2023) can be improved by talking to the broader Chinese literature and incorporating the institutional details of the higher education sector in China into its analysis.

First of all, as Li et al. (2023) rightly point out in the beginning of their paper that the enrollment in Chinese higher education has experienced a 10-fold expansion since 1999 and the resultant system is very diverse and highly stratified. The elite colleges, 211 project colleges, regular 4-year teaching colleges and 3-year vocational colleges operate in utterly different orbits with the elite colleges catching up quickly with the leading universities in the world on many fronts. The expansion concentrated disproportionally on the lower-tier universities, and therefore drove down the returns to an education in these universities as well as the overall returns to higher education to some extent. Another paper coauthored by the lead author of Li et al. (2023), Prof. Hongbin Li, clearly shows that the college premium for young workers declined while the college premium for senior workers increased over the period 1990–2019 (Li et al., 2022). This trend is also evident in work of Chinese scholars, for example, Ding et al. (2012, 2013). Although I understand the sampling is not necessarily representative at the different tiers and further analysis of the four groups of universities may not be possible, the overall conclusion of Li et al. (2023) needs to be qualified.

Second, the Chinese labor market is also quite diverse. Dual labor market theory would not adequately capture its complexity. Public sector jobs couple strong stability and high benefits with relatively low nominal salaries. The private sector mostly relies on salaries but leading firms can attract even graduates of elite colleges. Therefore equation (1) in Li et al. (2023) at least needs to control for the sector the graduates landed in. The same goes for the city/region/industries of choice as these greatly shape the kind of work–life balance college graduates will enjoy.

Third, while I appreciate the Li et al.'s (2023) efforts to categorize the determinants into the three mechanisms of human capital, social network, and signaling, it might be difficult to pinpoint their independent effects using existing data. For example, it might be premature to draw the conclusion that human capital accumulation in college does not generate the proper returns for students because human capital proxied by the grade point average (GPA) may affect students' long-term socio-economic status through the possibility of securing a spot for graduate school abroad or in China. Li et al.'s (2023) table 3 shows exactly that students who intend to go to graduate school have much higher GPAs. Even among students who enter the labor market immediately upon graduation, their GPAs are somewhat correlated with other variables in the other two dimensions. In particular, when local party organizations consider who to recruit as their member, GPA is definitely one of the criteria.

On the social network front, is parental income social capital or economic capital? Other researchers have looked at this question using whether or not parents work in the public sector, whether or not they are party members or whether or not they hold public offices. Parental education is usually used as a measure of cultural capital. Moreover, is a student's score on a college entrance exam a signal or a measure of the student's cumulative human capital prior to college?