College expansion and youth unemployment

Education is a main part of human capital investment so as to boost economic growth, which was proved by many empirical studies in East Asia. In 1998, China was going to follow this path and its college intake increased rapidly. But more and more youth college graduates faced unemployment or had to work in informal sectors. Does college expansion lead more youth unemployment? The author uses a dynamic Computable General Equilibrium model to study this issue. In the model, labor is classified into three education levels and six occupation types; and different type of person has different sack rate, job entry limitation and willingness to change his occupation. The simulation is designed as, assumed college expansion had not happened, to see what the difference were. It is certain that China would go into another growth path with a different college composition of labor force and a different youth unemployment rate. The result may shed light on the relation between college expansion and youth unemployment.