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To meet the needs of economic growth and human resources demand, the HKSAR Government proposed in the 2000 Policy Address that higher education should be made available to at least 60% of the youth by 2010. Over the past 10 years, higher education in Hong Kong has been developing rapidly. The percentage of youth aged 17-20 receiving higher education increased from 33% in 2001, to 43% in 2003 and 57% in 2005.  Since 2006, this percentage has risen to about 65%, exceeding the original policy goal. In recent years there are even views that there is an oversupply of higher education. 

In fact, university first degree places funded by the Government did not show an obvious increase from 1996 to 2006. The percentage rise was actually a result of the growth in 'postsecondary sub-degree education', including various certificate, diploma, higher diploma programmes and the newly developed associate degree programmes. The Government funding for these programmes is different from that for university degree programmes: land allocation and low interest loans for institutions; grants and loans for students through the Student Financial Assistance Agency. The operation of these programmes is 'self-financed' with tuition fees mostly around HK$40,000 to $50,000 per year. They have thus been criticized as a 'high cost but low return' investment for students. 

Prof. Chung Yue-ping of the Faculty of Education at The Chinese University of Hong Kong (CUHK) has received funding from the University Grants Committee on Public Policy Research to investigate the economic returns to postsecondary sub-degree education in Hong Kong. Based on the 1996, 2001 and 2006 census data, Professor Chung identified more than 30,000 graduates of postsecondary sub-degrees and analysed their background and performance in the labour market, including the programmes studied, male-female ratio, employment condition and mean wage from main employment. The study also assesses the change in the general rate of returns (RoR) to education in this ten-year period. Major findings include: 

1. During the ten-year period from 1996 to 2006, the RoR to education in Hong Kong showed continuous increment from 9.8% to 12.4%, showing that economic development in Hong Kong after its return to Chinese sovereignty emphasizes more on the education level and capability of the people;
2. After Hong Kong's return to Chinese sovereignty, there is a general increase in the education level in Hong Kong. One of the main reasons is the rapid expansion of postsecondary sub-degree education;
3. Contrary to public opinion, graduates from postsecondary sub-degree education have a general advantage in their employment condition over those matriculated graduates who do not receive postsecondary sub-degree education;
4. Contrary to public opinion, graduates from postsecondary sub-degree education on average earn 15 to 40% more than matriculated graduates who do not receive postsecondary sub-degree education, even excluding those in the better paid education and medical fields of study;
5. The advantage of graduates from postsecondary sub-degree education in employment condition and earnings increased generally during the period of 1996 to 2006. 

From the perspective of economic returns, there is still great development potential for higher education at the postsecondary sub-degree level. However, the rapid expansion of such education in the past ten years has caused intense competition among education institutions. Professor Chung suggests that postsecondary sub-degree education should go through a period of adjustment in the coming years. The Government should provide greater support to policy research in this area to obtain more accurate information for formulating long-term development policies.