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Economic consequences of horizontal stratification in postsecondary education: evidence from urban China

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Abstract

Drawing on nationwide representative data, we study the patterns of horizontal stratification of higher education in contemporary urban Chinese society, examining how college major, location, and ranking affect college graduates’ occupational income and the likelihood of assuming a managerial position. The results suggest that (1) college major differentiates graduates’ occupational income, with STEM and professional majors having significant economic advantages. (2) College ranking is significantly correlated with the likelihood of assuming a managerial position, implying that college ranking is an effective signal of prestige to employers in urban China. (3) A “Big City Effect” is detected as college location is significantly associated with salary levels after controlling for job location. This study adds an Eastern case to the literature on education stratification. Theoretical implications of empirical findings are also discussed

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Notes

  1. We very much thank an anonymous reviewer for directing us to these studies.

  2. The percentage of graduates from the medical school is larger than that of law school graduates in public sectors. Based on the CGSS 2008, the percentage of medical school graduates is 14.84 percent, while for law school graduates, 3.85 percent.

  3. The “Big City Effect” should not be attributed to the effect of job location, as the Big City Effect is still significant after controlling for job location. Besides, no multi-collinearity problem is detected between college location and job location.

  4. According to the CGSS 2008, 15.65 percent of urban residents have attended college, in contrast to one percent in rural China.

  5. This measure distinguishes between low-level employees and those with some level of workplace authority. However, we are unable to distinguish between different degrees of authority. Also, with a descriptive percentage of around 50 percent, the extent of variation of this variable is moderate.

  6. Education refers to a series of education-related disciplines including Educational Psychology, Library Science, and Information Science. The category of “Others” mainly includes the Social Sciences such as Demography, Political Science, and Sociology, and Arts and Sports. Due to the relative small sample size, we cannot examine the specific economic consequences of the social sciences.

  7. For instance, Minzu (Nationality) University of China (MUC) is affiliated under the State Ethnic Affairs Commission and a large portion of college graduates at MUC are minorities. Chinese People’s Public Security University was affiliated under the Ministry of Public Security and admitted college students usually satisfy certain physical requirements.

  8. The number of universities at towns is too small, so we combined towns and prefectural-level cities. Also, the prestigious universities in China are mainly located in province capitals and municipalities directly under the central government. Since there are only four municipalities directly under the central government, we decide to combine province capitals and municipalities directly under the central government.

  9. One concern in this operation is the multi-collinearity between these three variables. Supplementary assessment shows that this concern does not exist. Moreover, controlling for any of the two variables does not alter the coefficient of the third one.

  10. Due to space consideration, these results are not presented here, but available upon request.

  11. A managerial position, however, may not be directly related to a higher payment, for several possible reasons. For instance, there might be a trade-off between income and managerial position where an industry with rapid promotion may have a low level of average income. Another reason lies in the relatively “loose” definition of managerial position used here, as the measure does not require a formal managerial title, but rather, increased authority over others in the workplace. In this case, the wage gap between those who assume a managerial position and those who do not can be small.

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Acknowledgments

This research was supported by the Junior Scholar Project of the Ministry of Education of the People’s Republic of China (13YJC840014), the Chenguang Project of the Shanghai Municipal Education Commission (13CG06), the Research Initiation Project Funding for New Faculty Members of Fudan University, and the Capability Promotion Project Funding of Fudan University. The first author also gratefully acknowledges the general support from the research fund of the School of Social Development and Public Policy at Fudan University.

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Authors and Affiliations

  1. Department of Sociology, Fudan University, 831, Liberal Arts Building, 220 Handan Road, Shanghai, 200433, China

    Anning Hu

  2. The University of Texas at Dallas, 800 W. Campbell Road, GR31, Richardson, TX, 75044, USA

    Nicholas Vargas

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  1. Anning Hu
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Correspondence to Anning Hu.

Appendix

Appendix

See appendix Tables 5 and 6, and Fig. 1.

Table 5 Results of multinomial logistic model predicting college majors
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Table 6 Results of multinomial logistic model predicting college location and ranking
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Hu, A., Vargas, N. Economic consequences of horizontal stratification in postsecondary education: evidence from urban China. High Educ 70, 337–358 (2015). https://doi.org/10.1007/s10734-014-9833-y

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