Massive expansion of universities in Asia raises tough questions on social mobility

Job seekers at a job fair in Chongqing, China. Reuters

Universities in East and South-East Asia have experienced significant expansion in the last few decades. Enrolment in higher education in Asia has increased by over 50% in the last 10 years and by a higher percentage in countries such as China. In recent years, universities in mainland China have produced over seven million graduates a year, up from one million in 2000.

This rapid expansion of higher education has brought its own problems, leading to issues over academic standards and quality of universities in mainland China, Taiwan, South Korea, and Japan. My own new research has also highlighted strong empirical evidence suggesting that the “massification” of higher education – the extension of university education to the masses and not just an elite – has resulted in graduate unemployment and underemployment in East Asia.

For the most part, the statistics I found tell a worrying story. In South Korea, there are three million economically inactive graduates. In Japan, approximately 38% of graduates were unemployed eight months after graduation in 2009 and graduate employment has not improved since then. In India, one in three young graduates is unemployed.

In China, although accurate data is hard to come by, my research found that in 2013 alone only 38% of graduates were issued contracts – an indicator of quality jobs.

The table above provides further details about unfavourable graduate employment figures in China, Taiwan and Korea. Hong Kong and Singapore are exceptions to this graduate employment trend because both city states have attempted to set a quota for higher education enrolment, especially for publicly-funded universities. Hong Kong has a 20% cap for the annual cohort of 17- to 18-year-olds admitted to public universities, while Singapore has a cap of 25-30% for the same cohort.

Jobs for the young

Against the context of a move to expand higher education, it is apparent that youth unemployment has emerged as a serious social concern confronting a number of Asian countries.

The role of education in upward social mobility is under scrutiny. In a less globalised and more elite higher education system, a university degree may contribute to increased earnings and possibilities for a young graduate. But the status quo has changed with the ever-intensifying globalisation of higher education and its expansion to more and more parts of society.

A degree does not assure employment, high earnings, and upward social mobility. The promotion of social mobility through university credentials has become challenging in both developed and emerging economies. In top-tier colleges and universities in the US, almost three quarters of those entering each year are from the highest socio-economic quartile. The pool of qualified youth is far greater than the number admitted and enrolled.

Similar developments can be easily found in other parts of Asia, particularly when higher education expansion has not kept up with changing labour market needs. The unintended consequence of this has been a growing pressure to create more high-skilled job opportunities, but that pay less. This is a symptom of the over-supply of talents in what has been called the “Global Auction”, a worldwide competition for good, middle-class jobs.

What’s the point of a degree?

It is against this backdrop that questions are being raised about the value of a degree. A 2015 article in The Economist shed light on the issue of what sort of skills and knowledge sets universities must provide for students who will probably face uncertain futures and unclear global labour markets. We will certainly confront the situation whereby:

The value of a degree from a selective institution depends on its scarcity, good universities have little incentive to produce more graduates. And, in the absence of a clear measure of educational output, price becomes a proxy for quality. By charging more, good universities gain both revenue and prestige.

The expansion of higher education does not necessarily lead to upward social mobility. Yet, it has changed the social and economic role of higher education in the lives of graduates, especially when they begin to cast doubt on the economic return of heavy investment in higher education.

The cruel reality confronting many university graduates is intensified competition, and little choice but to face an “opportunity trap” that has created increasing social congestion for decent jobs.

An over-supply of university graduates carrying high expectations for career development and upward social mobility could create serious social and political pressure – particularly if they keep confronting a mismatch between their expectations and the cruel reality of the global labour market.

We may witness an increase of unhappy young people, which will require East Asian governments to address the widening gap between the changing economic structures and the massive, and growing, supply of qualified graduates.