The Mechanism of Over-Equilibrium in China's Shadow Education Market and Its Social Crisis

Abstract

In China, many problems seen in the compulsory education period are caused by the over-equilibrium of the shadow education market, i.e. people’s excess demands for and excess supply of shadow education. The over-equilibrium is the result of excess demand and excess supply in the shadow education market. The excess demand is attributed to unbalanced human capital ROI, strong signal functions of diplomas, vicious competition and ignorance of leisure. The disordered development of capital in the shadow education industry leads to excess supply. The excess demand and excess supply give rise to great scale of shadow education, harming the students, parents, teachers, schools and the society. The policy to ease the burden of excessive homework and off-campus tutoring for students undergoing compulsory education (the “Double Reduction Policy”) is effective in solving the over-equilibrium in the shadow education market from the perspectives of both demand and supply.