The Long Run Effect of China’s Higher Education Expansion on the Unemployment of Universities and Colleges Graduates

In order to increase the number of higher education, Chinese government carried out the higher education expansion policy from 1999. After 18 years of China’s higher education expansion policy, The conclusion about the relationship between unemployment rate of long-term among Universities graduates and College graduates (UGCG) and higher education expansion policy is still unknown. The approach of Multivariate Time Series Analysis (MTSA) was employed as a model with data sets from 1999 to 2017 to investigate the long run effect of China’s higher education expansion on the UGCG. Then using augmented Dickey Fuller Test to fit estimates and verified the model. We find that China's expansion policy has sharply increased the unemployment rate among young college graduates in the long run. On the other hand, We also noticed that the unemployment rate for UGCG has relationship with regions and family income. The result indicates that the Chinese government should reduce the number of enrolment and increase the employment rate of students. We suggest that encouraging regional mobility of UGCG and increasing matching quality can potentially reduce the unemployment rate at the national level.