Massification of higher education and youth transition: skills mismatch, informal sector jobs and implications for China

This study adopts a nationwide survey data set between 2005 and 2013 (Chinese General Social Survey) to explore the influence of the massification of higher education on the transition of Chinese youth into the labour market. Data analysis reveals two major findings. First, the economic returns to college education of recent cohorts of university graduates (those who have graduated from universities not more than 3 years ago) are lower than the cohorts who graduated in 2005 and 2006. Second, recent cohorts of college graduates are likely to work in the urban informal sector, unlike their senior counterparts. These findings could partially be explained by skills mismatch in the labour market but a comprehensive understanding of graduate unemployment in China could be obtained by bringing the broader political economy perspective into the analysis.