A Study On Economic And Social Contributions Of Enrollment Expansion Of The University

Higher education in China has experienced three stages of development since its reform and opening up to the outside world:the steady development from 1978 to 1998; the great leap from 1999 to 2008; and the sustainable promotion from 2008 to now. The second period is historically specific in China, as the enrollment of higher education expanded within a very short period. Therefore, it is an urgent task to conduct researches on the contributions of enrollment expansion to the cost of higher education, to the development of higher education, to the economic scale of higher education and to the growth of national economy as well.Starting from the theoretical concepts related to the costs of higher education, the thesis conducts an investigation into the contributions of enrollment expansion to the costs of higher education from a macro perspective, based on relevant factor analysis and comparative studies. The research shows that enrollment expansion leads to the increase in the costs of higher education, as is revealed in the increasing proportion of college students to teaching staffs. The average cost of college students declines on the comparable basis with a decreasing rate of 1.96 percent.By adopting the dummy variables of cut-off point in enrollment expansion introduced in 1999, this paper estimates the C-D production function model of Chinese higher education, which reveals that due to the expansion of enrollment, the economic multiplier effect of Chinese higher education has been raised from 1.11 to 1.76, which amounts to an increase of 58.93 percent.The comparative study of the contributions of enrollment expansion to the development of higher education proves that it has made China rank first in the world in terms of the scale of higher education; that the of Gross Enrollment Rate increases rapidly; that the scale of higher education has been improved to a great extent which is evident both in human and material resources and in structure; and that the internal construction of higher education becomes more and more harmonious. However, it also reveals the problems of the inadequacy of financial incentives, of the expansion of university debts, of the similarities in construction and development, and of the difficulties of students'unemployment.This paper demonstrates the rationality and feasibility of the Two-sector Model based on the introduction of dummy variable. This approach can also be applied to similar cases with periodical developments and elastic changes.By analyzing the relevant data from 1978 to 2008 and by adopting the dummy variables of cut-off point in 1999 on the basis of enrollment expansion, the Two-sector model is established on which the following conclusion is made:the development of higher education promotes the growth of national economy since China adopted its reform and opening policy. Nevertheless, the enrollment expansion leads to the decline of contributory value and the change of contributory structure. Its direct contribution turns from negative to positive; and indirect contribution from positive to negative, as the increase of 1% in the expenditure of higher education brings the changes of average value from -0.397% to 0.240% in direct contribution, from 0.626% to-0.101% in indirect contribution, and from 0.229 to 0.138% in comprehensive contribution. From this model, it can be predicted that the contributory value in the next decade will be featured with a wave-like development with small range and long span, varying from 0.17% to 0.20% with an average value of 0.183%.Based on the model established on the time series analysis of the relation between the contributory value of higher education and the Gross Enrollment Rate, the following conclusions can be made:the increase of the Gross Enrollment Rate (1%) leads to the decline of contributory value (0.0183%); however its steady contribution is the increase of 0.0015% in GDP, and its long-term contribution 0.0001% in GDP per year.To sum up, universities take late-mover advantages in the game of bank-university loan and they are the decision-maker of Game Equilibrium as well. Government plays multiple roles in the Game due to the fact that as the leader as well as the beneficiary, government is ultimately responsible for this game.