The Macroeconomic Consequences of Competition for College Admissions

• 成果类型: Article; Early Access
• 署名作者: Gu, Shijun; Zhang, Lichen
• 署名单位: Central University of Finance & Economics; University of Hong Kong
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.70104
• 发表日期: 2026
• 关键词: technology; constraints; investments; education; MODEL

摘要

To study how college-admissions competition shapes parental investment and child-development policies, we develop a heterogeneous-agent life-cycle model in which parents invest in children's human capital to raise future labor productivity and compete for limited college seats. Because families ignore their spending's effects on others' admission chances, competition creates a rat race with overinvestment. Estimating the model with Chinese data, we find that this externality accounts for a substantial share of parental monetary investment. Policies that reduce competition raise current-generation welfare but may diminish future human capital. Taxing private education spending while subsidizing public investment can balance this trade-off and improve overall welfare.