Technological Rivalry and the Allocation of Talent: Evidence from China's College Admission

Abstract

This paper studies how the U.S-China technology rivalry reshapes college admissions across fields of study using novel college admissions data and job posting data from China. Exploiting differential exposure to tariff escalation and export restrictions across major-region pairs over time, we find that more exposed pairs experience larger increases in admissions selectivity and enrollment, particularly for STEM majors and elite universities.  A one percentage point increase in the tariff exposure raises  admission cutoff scores by 2-3 percent. Labor market returns shift in the same direction, with rising wage premia for STEM-related and R&D-intensive positions, consistent with a defensive-innovation channel in which rivalry pressure spurs self-reliance and innovation effort in China, increasing demand for science and high-end engineering skills.

Keywords: Trade War, Field of Study, Return to STEM