This article explains why the massification of higher education in Hong Kong has, contrary to the predictions of received wisdom, failed to enhance the upward social mobility of the youth in the city. Building upon recent literature in political science, it argues that massification can take different forms, which in turn determine the effects of massification on various social groups. Through exploring three critical phases in the city's higher education reform, this article demonstrates how higher education policies have been heavily shaped by the interests of the city's elites, who, on the one hand, see the expansion of higher education as a solution to such social and economic problems as unemployment and regional integration but, on the other, remain reluctant to increase public spending on the education sector. As a result, higher education has expanded almost exclusively in the private sector. Due to poor planning and implementation, graduates from self-financed programmes are severely disadvantaged in terms of employability, resulting in wage compression and unemployment. The findings of this study shed light on the regressive nature of higher education.