Abstract
There has been a massification of higher education in Hong Kong since the late 1980s. In addition to programmes offered by local higher education institutions, there are plenty of off-shore degree programmes provided by overseas institutions. In the meantime, Hong Kong has been restructured to an international financial centre, and its financial sector has become one of the largest employers. This cross-sectional study based on Hong Kong’s 2011 census data examined the economic effects of university education in terms of earnings in the financial sector of Hong Kong. The major findings about the earnings effect in the sector are: firstly, a match between education and occupation does not necessarily bring about an earnings advantage; secondly, it refutes previous studies reporting that women are disadvantaged in terms of pay as compared with men; thirdly, workers holding an off-shore degree suffer an earnings disadvantage compared with those holding a local or overseas degree. The results also revealed that the provision of off-shore degree programmes in Hong Kong might be of concern to the government and community.
Similar content being viewed by others
Notes
The three largest employers are (1) wholesale, retail and import/export trades, restaurant and hotel sector, (2) community, social and personal service sector and (3) financing, insurance, real estate and business service sector, with employment share of 31.2 %, 25.6 % and 18.9 %, respectively, in 2011 (Census and Statistics Department 2012).
References
Aigner, D. J., & Heins, A. J. (1967). On the determinants of income inequality. The American Economic Review,57(1), 175–184.
Arulampalam, W., Booth, A., & Bryan, M. (2004). Training in Europe. Journal of the European Economic Association,2, 346–360.
Becker, G. (1993). Human capital: A theoretical and empirical analysis with special reference to education. Chicago: University of Chicago Press.
Berger, M. C. (1988). Predicted future earnings and choice of college major. Industrial and Labor Relations Review,41(3), 418–429.
Berggren, C. (2011). The education-occupation match, seen from an educational perspective. Scandinavian Journal of Educational Research,55(2), 105–120.
Borgen, N. T. (2015). Changes in the economic returns to attending prestigious institutions in Norway. European Societies,17(2), 179–241.
Broecke, S. (2012). University selectivity and earnings: Evidence from UK data on applications and admissions to university. Economics of Education Review,31(3), 96–107.
Brynin, M., & Longhi, S. (2009). Overqualification: Major or minor mismatch? Economics of Education Review,28(1), 114–121.
Bunney, D., Sharplin, E., & Howitt, C. (2015). Generic skills for graduate accountants: The bigger picture, a social and economic imperative in the new knowledge economy. Higher Education Research & Development,34(2), 256–269.
Census and Statics Department. (2012). Hong Kong annual digest of statistics 2011. Hong Kong: Government Logistics Department. https://www.statistics.gov.hk/pub/B10100032011AN11B0100.pdf. Accessed May 4, 2018.
Census and Statistics Department. (2015). 2011 Population census sample data set user guide. Hong Kong: Census and Statistics Department.
Census and Statistics Department. (2017). Working Population by Industry, Sex and Age Group, 2011. http://www.census2011.gov.hk/en/main-table/C134.html. Accessed Nov 15, 2017.
Chakravorty, S. (1996). Urban inequality revisited: The determinants of income distribution in U.S. metropolitan area. Urban Affairs Review,31960, 759–777.
Chan, C. W. (2010). The economic effect of education in an information technology-penetrating economy: evidence from Hong Kong. Educational Researcher,39(5), 401–405.
Chan, C. W. (2012). The quality of Hong Kong’s self-financing sub-degree education from an economic perspective. Journal of Higher Education Policy and Management,34(4), 401–408.
Chan, S. J., & Lin, L. W. (2015). Massification of higher education in Taiwan: Shifting pressure from admission to employment. Higher Education Policy,28(1), 17–33.
Chan, S. J., & Lin, J. W. (2016). Aiming for better employment: A holistic analysis from admission to labour market. Journal of Higher Education Policy and Management,38(3), 282–296.
Chapman, E., & Young, J. (2010). Generic competency frameworks: A brief historical overview. Education Research and Perspectives,37(1), 1–24.
Chen, E. K. Y., & Li, K. W. (1996). Industry and industrial policy. In H. C. Y. Ho & L. C. Chau (Eds.), The Hong Kong economy in transition (pp. 87–108). Hong Kong: Asian Research Service.
Chevalier, A. (2011). Subject choice and earnings of UK graduates. Economics of Education Review,30(6), 1187–1201.
Cohen, N. P., & Huffman, M. L. (2007). Working for women? Female managers and the gender wage gap. American Sociology Review,72, 681–704.
Cohn, E., & Ng, Y. C. (2000). Incidence and wage effects of overschooling and underschooling in Hong Kong. Economics of Education Review,19(2), 159–168.
Coleman, D. (2003). Quality assurance in transnational education. Journal of Studies in International Education,7(4), 354–378.
Confederation of Tourism and Hospitality (2017). Level 5 advanced diploma in hospitality management. http://www.cthawards.com/qualifications/management-programmes/level-5-advanced-diploma-in-hospitality-management/. Accessed Sept 11, 2017.
Crebert, G., Bates, M., Bell, B., Patrick, C. J., & Cragnolini, V. (2004). Developing generic skills at university, during work placement and in employment: graduates’ perceptions. Higher Education Research & Development,23(2), 147–165.
de Río, C., Gradín, C., & Cantó, O. (2011). The measurement of gender wage discrimination: The distributional approach revisited. The Journal of Economic Inequality,9(1), 57–86.
Dolton, P., & Vignoles, A. (2000). The incidence and effects of overeducation in the UK graduate labour market. Economics of Education Review,19(2), 179–198.
Drydakis, N. (2015). Economics applications in the UK labour market. International Journal of Manpower,36(3), 296–333.
Drydakis, N. (2016). The effect of university attended on graduates’ labour market prospects: A field study of Great Britain. Economics of Education Review,52, 192–208.
Education Bureau (2017a). Post-secondary education. http://www.edb.gov.hk/en/edu-system/postsecondary/index.html. Accessed Oct 11, 2017.
Education Bureau (2017b). List of registered courses. http://www.edb.gov.hk/tc/edu-system/postsecondary/non-local-higher-professional-edu/course/registered-course.html. Accessed Sept 11, 2017.
Education Bureau (2018). List of Registered Bachelor’s Degree Courses. http://applications.edb.gov.hk/ncr/ncr.aspx?langno=1&searchtype=3&country=&awardCode=104&bDiscipline=&duration=&entryCode=. Accessed May 2, 2018.
Edwards, J., Crosling, G., & Edwards, R. (2010). Out-sourcing university degrees: Implications for quality control. Journal of Higher Education Policy and Management,32(3), 303–315.
Ferber, M. A. (1995). Gender differences in earnings. In M. Carnoy (Ed.), International encyclopaedia of economics of education (pp. 242–247). Cambridge: Cambridge University Press.
Finch, D. J., Hamilton, L. K., Baldwin, R., & Zehner, M. (2013). An exploratory study of factors affecting undergraduate employability. Education + Training,55(7), 681–704.
Giles, M., Ski, C., & Vrdoljak, D. (2009). Career pathways of science, engineering and technology research postgraduates. Australian Journal of Education,53(1), 69–86.
Government Information Services. (1990). Hong Kong 1990. Hong Kong: Government Printer.
Government Information Services. (1991). Hong Kong 1991. Hong Kong: Government Printer.
Government Information Services. (1992). Hong Kong 1992. Hong Kong: Government Printer.
Government of Hong Kong Special Administrative Region. (2000). Policy address 2000. https://www.policyaddress.gov.hk/pa00/p1e.htm. Accessed Sept 11, 2017.
Government of Hong Kong Special Administrative Region. (2003). 2001-based manpower projection for financial services up to 2007. http://www.edb.gov.hk/attachment/en/about-edb/publications-stat/major-reports/consultancy-reports/financial_eng.pdf. Accessed Oct 18, 2017.
Grove, W. A., & Hussey, A. (2011). Returns to field of study versus school quality: MBA selection on observed and unobserved heterogeneity. Economic Inquiry,49(3), 730–749.
Hartog, J., Sun, Y., & Ding, X. (2010). University rank and bachelor’s labour market positions in China. Economics of Education Review,29(6), 971–979.
Heckman, J., Lochner, L. J., & Todd, P. E. (2003). Fifty years of Mincer earnings regressions. Cambridge, MA: National Bureau of Economic Research.
Heckman, J., Lochner, L. J., & Todd, P. E. (2005). Earnings functions, rates of return and treatment effects: The Mincer equation and beyond. Bonn: The Institute for the Study of Labor.
Heckman, J., & Rubenstein, Y. (2001). The importance of noncognitive skills: Lessons from the GED testing program. American Economic Review,91(2), 145–149.
Ho, H. K. (2016). The release of HKDSE results. Singtao Daily, 19 July 2016.
Hoekstra, M. (2009). The effect of attending the flagship state university on earnings: A discontinuity-based approach. The Review of Economics and Statistics,91(4), 717–724.
Hussain, I., McNally, S., & Shqiponja, T. (2009). University quality and graduate wages in the UK. Bonn: Institute for the study of labour IZA discussion paper series no. 4043. ftp.iza.org/dp4043.pdf. Accessed Nov 18, 2017.
Information Services Department. (1998). Hong Kong 1997. Hong Kong: Government Logistics Department.
Information Services Department. (2007). Hong Kong 2006. Hong Kong: Government Logistics Department.
Information Services Department. (2016). Hong Kong 2015. Hong Kong: Government Logistics Department.
Kucel, A., Molina, I. F., & Raya, J. M. (2016). Over-education and its opportunity cost in Japan. Asia Pacific Education Review,17, 299–321.
Lamo, A., & Messina, J. (2010). Formal education, mismatch and wages after transition: Assessing the impact of unobserved heterogeneity using matching estimators. Economics of Education Review,29(6), 1086–1099.
Leung, C. Y. (2016). There are alternatives. http://www.ceo.gov.hk/chi/blog/blog20160713.html. Accessed July 26, 2016.
Levels, M., Velden, R., & Di Stasio, V. (2014). From school to fitting work: How education-to-job matching of European school levers is related to educational system characteristics. Acta Sociologica,57(4), 341–361.
Levin, H. M. (1997). Accelerated education for an accelerating economy. Hong Kong: Hong Kong Institute of Educational Research, the Chinese University of Hong Kong.
Levin, H. M. (1998). Education and the ability to deal with change. Hong Kong: Hong Kong Institute of Educational Research, the Chinese University of Hong Kong.
Lo, W. Y. W. (2015). Revisiting the notion of Hong Kong as a regional education hub. Higher Education Policy,28(1), 55–68.
Lo, W. Y. W., & Tang, H. H. H. (2017). Dancing with global trends: Higher education policy and University Governance in Hong Kong, 1997-2012. Journal of Educational Administration and History,49(1), 53–71.
Lowden, K., Hall, S., Elliot, D., & Lewin, J. (2011). Employers’ perceptions of the employability skills of new graduates. London: Edge Foundation.
Machin, S. (2009). Education and inequality. In W. Salverda, B. Nolan, & T. M. Smeeding (Eds.), The Oxford handbook of economic inequality (pp. 406–431). New York: Oxford University Press.
McGowan, A. M. & Andrews, D. (2017), “Skills mismatch, productivity and policies: Evidence from the second wave of PIAAC”, OECD economics department working papers, no. 1403. Paris: OECD Publishing. http://dx.doi.org/10.1787/65dab7c6-en. Accessed Oct 6, 2017.
McGuinness, S. (2006). Overeducation in the labour market. Journal of Economic Surveys,20(3), 387–418.
Millican, J., & Bourner, T. (2011). Student-community engagement and the changing role and context of higher education. Education + Training,53(2/3), 89–99.
Milliken, J., & Colohan, G. (2004). Quality or control? Management in higher education. Journal of Higher Education Policy and Management,26(3), 381–391.
Mincer, J. (1958). Investment in human capital and personal income distribution. Journal of Political Economy,66, 281–302.
Mincer, J. (1974). Schooling, experience, and earnings. New York: National Bureau of Economic Research.
Mok, K. H. (2016). Massifying and internationalising higher education, changing labour markets and social mobility: Challenges for education and urban governance. Journal of Higher Education Policy and Management,38(3), 233–241.
Moreno-Galbis, E., & Wolff, F. (2008). New technologies and the gender wage gap: evidence from France. Industrial Relations,63(2), 317–342.
Ňopo, H. (2008). Matching as a tool to decompose wage gaps. The Review of Economics and Statistics,90(2), 290–299.
Nordin, M., Persson, I., & Rooth, D. (2010). Education-occupation mismatch: Is there an income penalty? Economics of Education Review,29(6), 1047–1059.
Osmani, M., Weerakkody, V., Hindi, N. H., Al-Esmail, R., Eldabi, T., Kapoor, K., et al. (2015). Identifying the trend and impact of graduate attributes on employability: A literature review. Tertiary Education and Management,21(4), 367–379.
Polachek, S. (1978). Sex difference in college major. Industrial and Labor Relations Review,31(4), 498–508.
Robst, J. (2007). Education and job match: The relatedness of college major and work. Economics of Education Review,26(4), 397–407.
Steering Committee Review of the Post-Secondary Education Sector. (2008). Report of the phase two review of the post-secondary education sector. http://www.edb.gov.hk/attachment/en/about-edb/publications-stat/major-reports/phase2reviewreport(eng).pdf. Accessed Oct 18, 2017.
Tang, H. H. H., & Tsui, C. P. G. (2018). Democratizing higher education through internationalization: The case of HKU SPACE. Asian Education and Development Studies,7(1), 26–41.
Tang, H. H. H., Tsui, C. P. G., & Chau, C. F. W. (2018). Sustainability of massification in East Asian higher education: Community colleges in Hong Kong in retrospect and prospects. In R. L. Raby & E. Valeau (Eds.), Handbook of comparative studies on community colleges and global counterparts (pp. 63–82). New York: Springer.
Waters, J. L., & Leung, M. W. H. (2016). Domesticating transnational education: discourses of social value, self-worth and the institutionalisation of failure in ‘meritocratic’ Hong Kong. Transactions of the Institute of British Geographers,42(2), 233–245.
Willcoxson, L., & Wynder, M. (2010). The relationship between choice of major and career, experience of university and attrition. Australian Journal of Education,54(2), 175–189.
Wong, Y. L. (2018). Angels falling from grace? The rectification experiences of middle-class community-college students in Hong Kong. Studies in Higher Education. https://doi.org/10.1080/03075079.2018.1428949.
Woodhall, M. (1997). Human capital concepts. In A. H. Halsey, H. Lauder, P. Brown, & A. S. Wells (Eds.), Education: culture, economy, society (pp. 219–223). New York: Oxford University Press.
Funding
This work was supported by the Open University of Hong Kong under School Research Fund [R4079].
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Chan, C.W. The earnings advantage of university education: a case study of the financial sector in Hong Kong. Educ Res Policy Prac 19, 49–62 (2020). https://doi.org/10.1007/s10671-018-9241-7
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10671-018-9241-7