Abstract: China has begun expanding higher education since 1999. The policy of expansion caused a rapid increase to the number of younger educated labor， and affected college wage premium. Following Card and Lemieux's two-step model with the data set from 1989 to 2009，this paper examines the effect of changes in relative supply of college graduate workers on their relative wages and further investigates the elasticity of substitution between college and high school cohorts．

Keywords: expansion of higher education; labor supply; college wage premium; elasticity of substitution