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[China needs more human capital as its working age population starts to shrink. It will be nice if China could start all-rounded education and training as early as possible, not just focus on academic training, but having better integration of schools and the labor market.]
Reporter: You mentioned in Shanghai Forum 2014 that the current ongoing problem of the unemployment and underemployment of youth here in Asia. How do you define youth and adult here? What causes the unemployment and underemployment in general?
Wei-Jun Jean Yeung: The definition of adult— is often a very arbitrary one. 18 is used as a legal definition in many countries, but it is not adequate for many purposes considering most people at 18 are still in schools. We define adults as those who are economically independent and psychologically mature. Obviously you can define it by age or other characteristics. There is no perfect definition, but there’s a general agreement in the literature to conceptualize the period of transitioning into adulthood with the ages between 15 to 24 or 29.
In our paper, we examine three regions: East Asia, Southeast Asia and South Asia. They are different in socioeconomic development and demographic landscapes; however, the youth unemployment is all very high, which is very damaging to human capital development. In general, the most important reason is that many of the youth population don’t have enough human skills, human capitals. Low education is one reason: enough education, or inadequate education to meet the needs of the market. Another prominent factor is the economic crises. During an economic recession, it is the youth who gets hurt most. They are often the last to be hired but first to be fired. As they have the lowest skills and experience and their wage level is low, they get lay-offs most often. Then, there are all kinds of different institutional and employment policies that make youth unemployment high. Southeast Asia has the highest unemployment rate, which is mostly driven by Indonesia and the Philippines. What I am most concerned about is how the youth population can successfully make a transition from school to the labor market.
Reporter: What about the situation here in China?
Wei-Jun Jean Yeung: The situation here in China is driven by two groups at different spectrum of education levels. One group consists of the youth who don’t have enough education; the other group consists of youth who have a college education.
As you know, the high school enrollment rate is still very low in China: only about half of the youth population here in China attend high school. So there is a large group of youth who have low skill, who don’t have enough skills to get employed. They are mostly in rural areas. Some of those are migrant workers who come from rural areas and are living in the city. They are here; many of them don’t have a formal job contract. Many of them are working at very low-skilled jobs with low wage or unemployed. Some are employed but underemployed working in temporary jobs with low wage and below their skill levels. So we have to look at not only the unemployment rate; the underemployment is also a big problem.
The other group in China that has unemployment rate is the highly educated college graduates. Since 1999 college expansion, the enrollment or the graduation rate increase from 1 million to now 7.2 million. The oversupply of graduates partly leads to the issue here. Also there is a mismatch for many students in what they learn in school and what the market needs. We find a lot of young population that are highly educated, who has high expectation and high aspiration of what they feel they are entitled to, but they still couldn’t find a match in the market. So China actually has two ends of the problem. One is low-income and low-skill, and the other is the highly-educated.
Also, in China, young women’s education is already higher than young man these days. However, their occupational status and wages are still lower than young men. This is also a source of wasted human resources. Gender equality is a serious concern in China today. Of course, to make full use of both men and women in the labor force and form family at the same time, other institutional adjustments have to happen. Financial incentives for the couples and quality childcare should be made more accessible to young couple.
Reporter: How about we first discuss the second group of youth, those who are highly educated but without a job? Do you think China has too many college graduates? Is that partly the reason for the current unemployment we have?
Wei-Jun Jean Yeung: Well, actually the college enrollment rate in China is still quite low by international standard. The gross college enrollment rate is only 25%, much lower than that in Korea (80%-90%), Japan (60%), and the United States (80-90%). Korea actually has the world’s highest college enrollment rate now. Korea really has the problem of oversupply of college graduates. That’s why they are now trying to shut down some academic schools and build more vocational schools. But that doesn’t seem to be the main problem in China. A lot of people argue that China needs more vocational training than academic learning. Actually in China, the increase of professional colleges since the 1999 has been parallel to the increase in academics in fact. Both academic and vocational colleges are important to develop.
Another serious problem is that college tuition is so high now. It keeps most of the low-income population, many in rural area, out of the college gate, creating an increasing divide between the life chances of urban and rural youth.
Reporter: Then what do you think is the main problem of Chinese Universities?
Wei-Jun Jean Yeung: I think maybe the problem lies more with the alignment of the curriculum with the true needs of the market and the lack of guidance (mentorship) to students. Concerning the curriculum, there can be a basic knowledge component and more applied component. What students learn should be in alignment with what the market needs. The educators need to take some time to rethink what the appropriate curriculum should look like.
Mentorship is another important aspect. College students often get lost. They get confused about what courses to take and what industry to get into. Mentorship within the university would be useful to guide students to ways they can develop. The system should be developed in high school as well, not in a way to determine for the students which way they should go, but to provide guidance and assistance. Every society needs criteria to decide who gets the education; it’s inherent in the society itself. But how the criteria are set is important. It doesn’t have to be all academic. It doesn’t have to be all examinations. So that is why you have to have mentors to guide students through the system.
Also, systems should be made more flexible as well. The switch between liberal arts and science is made too difficult for students here in China. Gap years are not so common here as well. Systems should be made more flexible, and align education, training, and jobs better. The problem here is that you have a huge rural area population who don’t have the resources for extracurricular training. So government should put more resources for those students in those areas to develop nonacademic skills in addition to academic skills. Concerning the huge rural population, it is very hard to change that. But the education system needs serious rethinking.
Reporter: So you believe that we can actually figure out exactly what the market needs beforehand so that we can train youth to work in that area?
Wei-Jun Jean Yeung: I believe that it works in both ways. What kind of labor and human resources you have will determine to a large extent what kind of economy you develop into, and vice versa. I am not saying that you can’t figure out what kind of economy you will have and train people to have skills needed, but it also works the other way: what kind of people you have determines the kind of economy you have. It works both ways, and it is a balance you have to take a little while to figure out.
Reporter: What about the first group of youth who have low education? What can be done about them?
Wei-Jun Jean Yeung：That’s actually what I am most concerned about. In my opinion, what China really needs now, is to solve the bottle neck of high school enrolment. China needs more people to have a high school education. China really does. Because no industry or economy can advance to a higher level with half of the youth population without a high school education. And then smooth out the educational skill level, and revise the curriculums so that they align better with what the economy needs. Not everyone needs an academic degree, so even at junior high and high school levels, they can set up a vocational track. The mindset that vocational schools are not as good as academic schools should also be altered. A good example would be Germany, which has a dual track educational system. They have a lot of opportunities early on for apprenticeship. So in Germany, the youth unemployment rate is very low. That’s one model to think about. Another problem in China is that vocational schools are too expensive, sometimes more expensive than academic high schools. So, again, many low-income populations cannot afford it or are not willing to invest in education for longer term benefits of skills.
Reporter: A lot of people here in China (students, parents, even teachers) argue that the education we have is not helpful with future career and suggest that we shouldn’t put as much emphasis on education here in schools. What is your opinion?
Wei-Jun Jean Yeung: I understand that there is a lot of cramming in Chinese schools and some educational skill level is too high, for instance, math here is made very difficult. However, though the current education system here in China needs improvement, education in schools constitutes a great proportion of youth education. A lot of the basic skills are taught in schools, such as math, English, writing, understanding how society works, liberal arts training etc. Maybe you don’t see it as immediately useful, but I think those basic training are very important. Education of youth is a collective effort and schools are not supposed to teach you everything. However, some of those that youth learn in school are relevant with their later career. Some argues that you can learn everything while working. Well, you are supposed to relearn because learning is a continuous process. However, schools still partly serve to help youth with the transition of study and work. There is definitely room for improvement, but in schools you learn about knowledge as much about learning how to learn, which is important for any individual’s development. Besides, to be successful in a mature labor market, one simply cannot get away without a high school education: When Japan, Korea, and Taiwan were at a developmental level similar to China today, , there was almost 100% high school education attendance in those countries. As I mentioned earlier, high school attendance now becomes a bottle neck for China as more than half of Chinese adolescents cannot afford to or do not wish to attend high school. High school curriculum should be aligned better with market demands. Taiwan and Singapore have a bit more character development component in their school curriculum. Relatively speaking, they pay more attention to sports, art, music, and moral teaching. The whole society pays more attention to liberal arts. A lot of the concepts are not actually inherent in those cultures. They are learned later on from other countries recognizing the potential negative impact of only focusing on academic study on young people. The government has consciously changed policy to incorporate the new concept, such as building art schools, putting more resources in vocational training, requiring different aspect of skills to be trained etc. Definitely some level of policy intervention and coordination is needed. Otherwise the changes will be slow and unproductive. The system is a lot more powerful. It takes time, but it is a change that has to take place.
Reporter: Some scholars argue that most of the unemployment here in China is largely created by Hukou system, as they restrict the flow of labor from rural areas to cities. Do you agree with such a view?
Wei-Jun Jean Yeung: I do believe reform needs to occur as soon as possible - HuKou system restricts the flow of labor and the efficiency of a country to use its labor market. People’s ability to innovate and to move to where their talents are most useful is greatly compromised. Worse yet, the Hukou system even kills the aspiration of rural youth, who don’t even see the point of going to high school. Because of the HuKou system, even if they made through high school and college, many cannot find a job or internship opportunities. Schools should try to connect its students to the employment network and give them more opportunities.
The registration function of Hukou is good. All countries have registration systems. However, China’s Hukou system is connected to a different access to opportunities and public welfare benefits. A country shouldn’t be discriminating against its own citizens from the rural areas. Hopefully Hukou system will be abolished. The fact that college education doesn’t guarantee a good job and a successful transition to adulthood for rural youth largely has to do with the Hukou system. Removing the barriers set by Hukou is urgent, and will sure to reduce inequality in the country.
Reporter: What would be your advice to ease the unemployment and underemployment here in China?
Wei-Jun Jean Yeung: Have low-cost high school education for everyone – including both academic and vocational high schools. Right now, high school is made very expensive. Actually, according to the World Bank Study, high school in China is the most expensive in the world, in ratio to the per capita income in China. The high tuition of high school and the opportunity cost of going to high school greatly reduce the number of youth attending high school eventually. China cannot overcome the “middle income trap” with half of its youth without a high school education.
Therefore, make sure all youth have the opportunity to have high school training. Nine year mandatory education is no longer enough when China is set to progress to a new height of development. In Korea, Japan and Taiwan, the mandatory education has long been twelve years when those countries are at the developmental stage of China today. High school shouldn’t be only a three-year preparation for college and academic studies. It means a lot as well for those who are about to enter the job market and accept vocational training. Vocational high schools should be just important to develop as academic high schools.
For college, it’s about integration and match of market demands. Research shows very clearly if you have an early unemployment experience, later on your career trajectory will be a lot more fragmented. You will be more likely to have short episodes of employment with unemployment much more frequently, and the wages tend to be much lower. Early unemployment also has negative implications for behavior. The youth that have jobs that provide training and integration of the society, tends to have fewer behavioral problems later on.
Overall, China needs more human capital as its working age population starts to shrink. It will be nice if China could start all-rounded education and training as early as possible, not just focus on academic training, but having better integration of schools and the labor market. What I see as most urgent is to provide free or low-cost high school education for all youth. As for college education, pay more attention to the match between what students learn in school and the needs in the labor markets, and allow a much wider access to the large disadvantaged population in rural areas.
[Wei-Jun Jean Yeung]
Professor Jean Yeung holds a joint appointment in Asian Research Institute. She is the Research Leader of the Changing Family in Asia cluster in the Asia Research Institute and the Chair of the Director for the Center for Family and Population Research in the National University of Singapore. Her research encompasses American and Asian family demography and social stratification issues. Currently, she is working on changing families in Asia, the impact of internal migration on Chinese Children, and human capital and intergenerational transfers in Asia.
