The Empirical Analysis For The Impact Of FDI On University Graduates’ Employment In China

Influenced by various factors, employment of college graduates has graduallybecome the focal point which the theoretical circle and practical department wereconcerned about. Recently, existing literatures studied the topic of employment ofuniversity graduates mainly from the angle of Sociology and Education, fewliteratures from Economic, not to mention from FDI. On the other hand, most ofliteratures related to the impact of foreign investment on employment of universitygraduates studied the labor force as a whole, but not subdivided it. Therefore, thisarticle tries to examine how to achieve full employment of university graduates fromthe perspective of FDI based on the existing research, with a view to acquire valuableresearch results.First, this paper summarize the problems of university graduates’ employmentfrom home and abroad, then analyzed the mechanism how FDI affect the universitygraduates’ employment, and then find the relationship between them through thesituation described, finally set up a model through the Cobb-Douglas function andthe principle of profit maximization, using the panel data from30provinces and citesto make an empirical analysis for the impact of FDI on university graduates’employment from the view of overall, different regions and different industries.Empirical results show that as a whole, FDI directly drove university graduates’employment, the direct effects is positive, and then makes negative indirect effect onuniversity graduates’ employment through the technological progress and domesticfixed investment, but the total employment effect is positive. Judging from differentregions, the effect that FDI makes on university graduates’ employment from westernregion is positive, and most influence; in the central region the effect is positive too,but lower than the west; in the eastern region the effects from the second industry isnegative, from the third industry is positive, with the minimum affect. Judging fromdifferent industries, in addition to FDI of the second industry has a negative effect onuniversity graduates’ employment in the western region, the rest are positive influence.The second industry FDI has less influence on university graduates’ employment, andnot significant, obviously lower than the third industry. Finally, the possible reasonsleading to the conclusion have been analyzed.At the end of this article, relevant policy recommendations have been made according to the basic conclusion in order to promote full employment of universitygraduates.