Elite Overproduction: What the Legend of Kong Yiji Reveals About China, and What It Could Mean for America

The story of Kong Yiji is more than an obscure piece of Chinese literature that became an internet meme. It has become a symbol of what happens when a society produces more educated people than its economy can provide desirable, professional jobs for. The problem is not that education suddenly becomes useless. The problem is that education becomes a competition. When millions of people are told that a college degree is the path to a better life, more people pursue degrees, more employers begin demanding degrees, and eventually a bachelor's degree that once separated someone from the rest of the labor force becomes the minimum qualification for jobs that may not actually require one.

This phenomenon has been described as elite overproduction. The term originally comes from sociological and historical theories about societies producing too many highly educated or elite-status individuals relative to the number of positions available to them. China provides one of the clearest modern examples of this problem. But the underlying mechanism is not uniquely Chinese. America has many of the same ingredients: rapidly rising educational attainment, an increasingly competitive white-collar labor market, credential inflation, expensive universities, and young people who are discovering that doing everything society told them to do does not necessarily guarantee the life they expected.

The story of Kong Yiji makes this problem easier to understand.

The Legend of Kong Yiji

Kong Yiji was a fictional character created by the Chinese writer Lu Xun in his 1919 short story Kong Yiji. He is an educated man who repeatedly fails the traditional Chinese examinations that could have given him status and a respectable career. Instead, he becomes impoverished and survives by drinking and stealing food. His education does not translate into economic security. In fact, his education becomes part of the reason he feels unable to accept the work available to him.

More than a century later, Chinese young people began using Kong Yiji to describe their own experiences. Around 2023, the character became an enormous online meme among Chinese graduates struggling to find professional employment. At the time, China was preparing to graduate approximately 11.6 million university students in a single year, while the economy was struggling to create enough attractive white-collar positions for them.

The comparison was powerful because Kong Yiji represented something very modern: the frustration of being educated for a social position that no longer exists in sufficient numbers.

A young Chinese graduate could spend years studying, pass difficult examinations, earn a university degree, and still discover that the available jobs paid poorly or had little connection to their education. The problem was not necessarily that the graduate was lazy. The problem was that the supply of educated workers had grown faster than the supply of professional opportunities.

Research published in China Economic Review in 2026 found that graduate unemployment, declining labor-force participation, and underemployment have become major features of China's graduate labor market following the country's enormous expansion of higher education beginning in the late 1990s. The researchers found that more than half of Chinese college graduates experience at least one adverse employment outcome, including unemployment, withdrawal from the labor force, or employment in jobs that do not require a college degree.

That is essentially the modern Kong Yiji problem.

China Produced Millions of Graduates, But Not Millions of Elite Jobs

China's higher education system expanded dramatically beginning in the late 1990s. This was economically rational in many ways. A growing industrial and technological economy needed engineers, managers, scientists, accountants, teachers, programmers, and other skilled workers.

But education creates an interesting economic problem. It is relatively easy for a government and universities to increase the number of graduates. It is much harder to guarantee that the economy creates equally desirable jobs for all of them.

Imagine an economy with 1 million professional jobs and 2 million high-school graduates. A bachelor's degree might provide a significant advantage because relatively few people possess one.

Now imagine that universities produce 2 million graduates for an economy with only 1.2 million professional positions.

The degree has not necessarily become worthless. There are still 1.2 million people who benefit from having it. But the remaining 800,000 have a problem. They did what society told them to do, yet there are not enough positions at the other end.

This creates competition that can move down the economic ladder.

Employers begin requiring degrees for jobs that previously required only a high school diploma. Students respond by pursuing even more education. Employers then receive even more applicants with degrees and can raise their requirements again.

The result is credential inflation.

A bachelor's degree becomes the new high school diploma.

A master's degree becomes the new bachelor's degree.

Internships become prerequisites for entry-level positions.

And eventually, young people can spend six or seven years preparing for a job that is itself becoming harder to obtain.

That is one of the most important similarities between China and America.

America Is Building Its Own Education Arms Race

The United States has not reached China's situation, but it is increasingly possible to see the same competitive mechanism developing. The clearest evidence is not simply the number of Americans going to college. It is the enormous industry that has developed around getting into the right college.

College consulting, SAT and ACT tutoring, private admissions counselors, essay coaches, résumé services, academic tutoring, expensive summer programs, and specialized extracurricular programs have all become part of the competition surrounding selective college admissions. None of these services are inherently bad. A student may genuinely benefit from tutoring or professional guidance. The larger issue is what happens when an optional advantage becomes an expected requirement.

Once enough families believe that private preparation improves their child's chances of admission, more families have an incentive to purchase it. One student taking SAT tutoring may have an advantage over another student who does not. If thousands of students take SAT tutoring, however, the advantage becomes smaller. Families then spend even more money looking for another way to stand out.

The result is an educational arms race.

Students take more advanced courses because other students are taking advanced courses. They join more activities because other students have impressive extracurriculars. They seek internships because other applicants have internships. They conduct research because other students have research. They compete for leadership positions because leadership has become a standard résumé item.

The purpose of the competition slowly changes. Students are no longer competing simply to become educated. They are competing to prove that they are more exceptional than other already-qualified students.

America and South Korea Are Starting to Share the Same Pressure

This is where South Korea provides an interesting comparison. South Korea is famous for its hagwon system, a massive private education industry where students attend after-school academies to prepare for exams and improve their academic performance. The system exists partly because admission to prestigious universities can have major consequences for a person's future opportunities.

The important comparison is not that American SAT tutoring or college consulting is literally the same thing as a Korean hagwon. The comparison is the economic mechanism behind them.

When admission to a limited number of prestigious institutions becomes extremely important, families have an incentive to invest more resources into competing for those institutions. Once enough families do so, everyone else has to respond simply to avoid falling behind.

That is how competition becomes self-reinforcing.

If one student hires an SAT tutor, the advantage may be significant. If half the applicants hire tutors, tutoring becomes closer to the baseline. If students then begin hiring college consultants, admissions essay coaches, and résumé advisers, those services become the next layer of competition.

Eventually, students are spending more time and money trying to distinguish themselves from one another without necessarily becoming proportionally more educated.

This is the same basic problem seen in a competitive arms race. The individual decision can make perfect sense while the collective outcome becomes inefficient.

A family can rationally spend thousands of dollars on tutoring if it believes the tutoring improves the probability of admission to a selective university. But if every competing family makes the same calculation, the overall result may simply be that everyone spends more money to arrive at roughly the same relative position.

Falling Acceptance Rates Make the Competition Worse

The pressure becomes even more obvious when looking at America's most selective universities. The number of students capable of succeeding at elite universities has expanded, but the number of seats at those institutions has not expanded nearly as quickly.

This is why acceptance rates at many highly selective universities have fallen dramatically over the past several decades. Schools that once accepted a substantial percentage of applicants can now reject the overwhelming majority of students who apply.

That does not necessarily mean today's applicants are worse. In many cases, the opposite is true. The applicant pool has become larger and more academically competitive.

This creates an important distinction between becoming more qualified and becoming more likely to be admitted.

A student can have a 4.0 GPA, take difficult AP classes, earn a 1500+ SAT score, lead organizations, complete internships, conduct research, and win competitions and still be rejected by a highly selective university. The reason is simple: thousands of other applicants may have similarly impressive credentials.

As acceptance rates fall, the value of another achievement becomes increasingly relative.

An SAT score does not matter only because it demonstrates academic ability. It matters because of how it compares with the scores of other applicants.

An internship does not matter only because of what the student learned. It also matters because of how many other applicants have internships.

Leadership does not matter only because of the student's ability to lead. It matters because admissions officers are comparing that leadership against the leadership of thousands of other applicants.

The competition therefore becomes increasingly positional.

The goal is no longer simply to become good.

The goal is to become better than everyone else.

When Everyone Becomes Exceptional

This creates one of the strangest features of modern American education: the inflation of exceptionalism.

A generation ago, having strong grades and participating in a few activities could make a student stand out. Today, at the most selective universities, those characteristics are often simply the baseline.

Students may have perfect or near-perfect grades, advanced courses, high test scores, leadership positions, community service, internships, research, athletic achievements, and national competitions.

When everyone has impressive credentials, the credentials themselves become less informative.

That creates a cycle.

Students accumulate more achievements because other students have more achievements.

Universities receive more accomplished applicants.

Universities become more selective.

Students become more anxious about standing out.

Families spend more money on consultants and tutors.

Students accumulate even more credentials.

And the cycle begins again.

This is not fundamentally different from the educational competition that has developed in South Korea. The American system simply expresses the competition through a different collection of markets and institutions.

The Problem Does Not End at College

The most important part of this story is that the competition does not necessarily end once a student is admitted to college.

In fact, it can become even more intense.

Students who once competed for admission to prestigious universities now compete for internships at prestigious companies. They compete for selective graduate programs, investment banking positions, consulting jobs, technology positions, law school admissions, and other highly compensated careers.

The same credential inflation can appear again.

A bachelor's degree becomes the minimum requirement.

Then employers prefer relevant internships.

Then they prefer candidates with specific technical skills.

Then candidates obtain master's degrees or additional certifications.

The qualifications keep increasing because the number of people competing for desirable positions keeps increasing.

The result is that a young person can spend their entire childhood and early adulthood competing for the next level of the hierarchy.

High school is preparation for college.

College is preparation for internships.

Internships are preparation for a career.

The first job is preparation for the next job.

And at every stage, there are more people competing for the positions perceived to be worth having.

The College Premium Is No Longer Rising Like It Used To

This becomes especially concerning when the economic return to college is considered.

College graduates still earn significantly more than workers with only a high school education on average. That is important, and it would be misleading to claim otherwise. But the college wage premium has not continued expanding at the same pace that it did during the late twentieth century.

Research from the Federal Reserve Bank of Minneapolis found that the college wage premium rose sharply from the 1980s through around 2000 but has remained relatively flat since then. At the same time, the cost of attending college has continued to increase.

That creates a strange situation.

The number of Americans competing for college credentials has increased.

The cost of acquiring those credentials has increased.

The competition for selective institutions has increased.

But the relative wage advantage associated with a college degree has stopped rising as rapidly.

The degree is still valuable, but its value cannot be separated from what the graduate actually does with it.

A degree in a high-demand field that leads to a productive occupation can generate a substantial return. A degree that leaves someone underemployed can produce a much weaker financial outcome.

This is exactly why the Kong Yiji comparison matters.

The issue is not whether education has value.

The issue is whether the economy can create enough opportunities for the increasingly educated population to capture the value they were promised.

More Graduates, More Competition

The American economy has experienced a tremendous expansion in educational attainment. More people than ever attend college, and a much larger share of Americans possess bachelor's degrees than in previous generations.

That is generally a positive development.

But it also changes the labor market.

When a bachelor's degree was relatively uncommon, possessing one could dramatically distinguish a worker from the rest of the labor force. As degrees become more common, employers have more candidates with similar credentials.

The degree therefore becomes less useful as a sorting mechanism by itself.

Employers can respond by looking for additional signals.

Where did the candidate go to college?

What internships did they complete?

What technical skills do they have?

What leadership positions did they hold?

Did they graduate with honors?

Do they have a master's degree?

Have they completed relevant certifications?

This is how credential inflation feeds itself.

The more educated the population becomes, the more education and experience employers can demand because they have more applicants capable of meeting those requirements.

The American Kong Yiji

The American version of Kong Yiji therefore does not necessarily look like a starving scholar sitting in a Chinese tavern.

He could be a 24-year-old college graduate with $40,000 in student debt, several internships, years of extracurricular activities, and a bachelor's degree who is working a job that did not require a college education.

That situation is not inevitable, but it is becoming an increasingly important part of the conversation about the value of higher education.

Research summarized by the Federal Reserve Bank of St. Louis found a major difference between college graduates working in jobs that require a college degree and graduates who are underemployed. Recent graduates working in college-level jobs earn a much larger wage premium over high school graduates than graduates working in jobs that do not require a degree.

That distinction is critical.

The problem is not simply producing college graduates.

The problem is producing college graduates without producing enough productive positions that use their education.

If the economy can absorb the graduates into productive professional occupations, education can increase productivity and living standards.

If the economy cannot, the result can be a highly educated population competing for a limited number of desirable jobs.

That is where elite overproduction begins to matter.

America Could Be Creating a Credential Arms Race

The most concerning possibility is that America is creating a system in which the competition for education becomes disconnected from the actual economic value of education.

Parents pay for tutoring.

Students take more advanced classes.

Families hire consultants.

Students take standardized tests multiple times.

They attend summer programs.

They build elaborate extracurricular résumés.

They compete for selective internships.

They apply to increasingly selective universities.

Then they graduate and discover that they are competing against thousands of other people with remarkably similar credentials.

The competition has not disappeared.

It has simply moved to the next level.

This is why the comparison to South Korea matters. The Korean hagwon system demonstrates how an education market can become enormous when families believe that academic competition determines economic mobility. America may not have hagwons in the Korean sense, but it has built its own ecosystem of SAT preparation, college consulting, tutoring, admissions coaching, summer programs, and résumé building.

Different institutions.

Similar incentives.

The Real Warning From Kong Yiji

The real warning from Kong Yiji is therefore not that Americans should stop going to college.

It is that education cannot create elite opportunities faster than an economy can create productive positions.

If America continues expanding the number of people pursuing prestigious educational credentials while the number of prestigious positions grows more slowly, competition will become increasingly intense.

Acceptance rates will continue to matter more because students will have more credentials but fewer seats at the top.

College consulting will continue to grow because families will have more reason to search for an advantage.

SAT preparation will continue to matter because standardized tests become another way to distinguish candidates.

Internships will become more important because a degree alone will not distinguish graduates.

Graduate degrees may become more common because a bachelor's degree will distinguish fewer people.

And eventually, young Americans could find themselves in the same uncomfortable position represented by Kong Yiji: they did exactly what society told them to do, but there are not enough places at the destination they were promised.

The United States is not China, and its economy has enormous differences that matter. But history does not require two countries to be identical for the same economic mechanism to appear. A society can gradually build a system where more people compete for fewer elite positions, where education becomes increasingly expensive, where credentials become increasingly common, and where the economic premium for those credentials stops rising.

That is the path worth watching.

Because the greatest danger is not that America will have too many educated people.

The danger is that America could produce too many people educated for the same destination.