Evaluations of the Income Gaps of Chinese Overseas Students: A Quantitative Study of Unintended Consequences

Over the past several decades leaders in China have encouraged college students and graduates to attend universities in the United States and Europe in order to enrich their education and enhance the national understanding of the West. Those who study in Western universities believe that such study abroad would enhance their employability in China. Initially, overseas students had great competitive advantages when compared to domestic recent graduates and often averaged 24.7% higher incomes than that of the local labour force (Wang 2011).

However, the income gap had been narrowed in recent years. First, the accelerating globalization process and the rapid development of information technology system have provided more opportunities for local graduates to get access to knowledge resources from the western countries. Second, most of overseas students had experienced cultural-conflicts after they returned back to China as they attempted to adapt to the Chinese working and living environment. Under these circumstances, it has been increasingly difficult for overseas students to obtain jobs with high salaries and thus to recoup their investments during the process of studying abroad.

Survey data collected by the author is used to understand the following issues: (a) Identification of both internal and external reasons that lead overseas students to return China and seek job positions; (b) Understanding of the main factors that influence overseas students’ income once they return to China; and (c) An understanding of the experiences of Chinese students who have studied in the West in their search for employment in China and their experiences with employers and co-workers who did not study abroad. The analysis consists of regression models with covariates to explain the factors that result in costs and benefits of overseas study and the transition to participation in the Chinese labour force.