Research On The Mechanism Of The Effect Of Human Capital On Economic Growth In China

Sonce the reform and opening up, China has achieved sustained and rapid economic growth,which attracts many scholars to explore the source of Chinese economic growth. Human capital reflects the production capacity of workers, naturally becomes the focus of research.This paper carries out research from the perspectives of total factor productivity growth and the industrial structure transformation, with the effect of human capital on economic growth in China as the topic. On the one hand, through the analysis of the relationship between human capital and total factor productivity growth, this paper studies the indirect effect of human capital on economic growth. On the other hand, considering that Chinese economy is experiencing the transformation of traditional industry to modern industry, the industrial structure transformation is introduced to study the relationship between human capital and economic growth. Centering on the above research ideas, corresponding theoretical analysis and empirical study are carried out to investigate the mechanism of the effect of human capital on economic growth in China.First of all, based on the comparative analysis of the main methods to estimate human capital, the average years of schooling is selected to measure the human capital of Chinese provinces. In addition, taking into account the heterogeneity of human capital, this paper includes the population ratio of every level of education degree which is a relative indicator as a supplement. The calculation results show that, with the popularization of basic education and the development of higher education, the overall level of human capital in different regions of China is rising, and the structure of human capital is gradually optimized. Specifically, the average years of schooling is significantly raised, the population ratio of elementary education gradually reduces,the population ratio of secondary education ratio increased steadily, and the population ratio of higher education increases rapidly.Secondly, this paper applies DEA-Malmquist index method to measure the change of total factor productivity in Chinese provinces, and decomposes it as the changes of technical level and technical efficiency. The results showed that, from1995to2009, total factor productivity and technological level of every province show a rising trend on the whole, while technical efficiency is not significantly improved. In conclusion, total factor productivity growth in China mainly relies on technological progress, and technical efficiency has no significant effect on it.Thirdly, analyzing the impact of human capital on total factor productivity growth, this paper indirectly researches the relationship between human capital and economic growth. The empirical results show that higher education human capital has significant positive effect on total factor productivity growth which is realized mainly through promoting technological progress, per capita human capital and secondary education human capital make a smaller contribution to total factor productivity growth, and elementary education human capital has a certain inhibitory effect on total factor productivity growth.Finally, this paper analyzes the impact of human capital on Chinese economic growth from the perspective of industrial structure transformation. According to the Chinese economy in the stage of industrial structure transformation, this paper establishes economic growth model which includes traditional industry sector and modern industry sector to incorporate human capital and industrial structure transformation into a unified theoretical framework. Theoretical analysis shows that the level of human capital can promote economic growth and the transformation from traditional industry to modern industry strengthens this effect. Further, based on the theory model, this paper uses quantile regression to carry out the empirical analysis on the sample data of29provinces in Chinese mainland from1995to2009. The main conclusions are as follows. Per capita human capital significantly promotes economic growth. And different levels of human capital have different effect on economic growth: the increase of the population ratio of higher education and the population ratio of secondary education can improve the economic growth, but increasing the population ratio of elementary education is not conducive to economic growth. It shows that raising overall level of human capital and optimizing human capital structure help to promote economic growth. The transformation from traditional industry to modern industry can improve the output effect of per capita human capital, higher education human capital and secondary education human capital, but not increase the output of elementary education human capital. This empirical analysis concludes that the industrial structure transformation which is in conformity with human capital can optimize the allocation of human capital, so as to improve the economic growth effect of human capital.Thus, this paper expounds the mechanism of the effect of human capital on economic growth in China through theoretical analysis and empirical study. On the one hand, human capital as a production factor influences economic growth, which is affected by industrial structure transformation. On the other hand, human capital indirectly affects economic growth through its effect on total factor productivity growth.