Analysis of the Chinese college admission system
Abstract
This thesis focuses on the problems of the Chinese University Admission (CUA)
system. Within the field of education, the system of university admissions involves all
of Chinese society and causes much concern amongst all social classes. University
admissions have been researched since the middle of last century as an issue which
has economic impact. However, little attention has been paid to the CUA system from
the perspective of economics. This thesis explores a number of interesting aspects of
the system. As a special case of the priority-based matching mechanism, the CUA
system shares most properties of the Boston Mechanism, which is another example of
a priority-based matching mechanism. But it also has some unique and interesting
characteristics. The first chapter will introduce the main principles of the CUA system
in detail and discuss stability, efficiency, strategy-proofness, and other properties
under different informational assumptions.
There is a heated debate about whether the CUA system should be abandoned or
not. Educational corruption is one of the issues that have been raised. Corruption is a
major issue of the CUA system as well as university admission systems in other areas
in the world, e.g. India, Russia, etc. We contrast the performance of markets and
exams under the assumption that there exists corruption in the admission process. The
problem will be analyzed under perfect capital markets and also under borrowing
constraints. We use auction theory to obtain equilibria of the market system and the
exam system and analyse the effects of corruption on the efficiency of the two
systems. We conclude that the exam system is superior to the market system if we
only consider the issue of corruption.
In the third chapter, we construct a model to reveal the forces that positively sort
students into different quality universities in a free choice system under assumptions
of supermodular utility and production functions. Given a distribution of student
ability and resources, we analyse the planner's decisions on the number of universities
and the design of the "task level" for each university, as well as the allocation of
resources between universities. Students gain from completing requirements (tasks) in
universities, while having to incur costs of exerting effort. In contrast to previous
literature, our model includes qualifications as well as cost in the student's utility
function, and educational outputs depend on qualification, ability and resources per
capita. Our main focus is on the design of task levels. Our result differs from the
literature as regards the optimal number of colleges. A zero fixed cost of establishing
new colleges does not necessarily result in perfect tailoring of tasks to students.
Furthermore, if the fixed cost is not zero, then the planner has to take fixed costs into
account when deciding the number of universities.