Study On The Effect Of Human Capital Inequality On Total Factor Productivity In China

The extensive growth mode which depending on factor inputs is unsustainable, so accelerating China’s total factor productivity growth is the inevitable way to transform China’s economic growth mode and maintain economic development sustainable. A country’s total factor productivity growth is inseparable from human capital, but in the empirical research the impact of human capital on total factor productivity still exist a variety of problems, especially ignoring considering the effect of the inequality of human capital on total factor productivity. Therefore, this paper focuses on the human capital inequality,studying the relationship between our country’s human capital inequality and the total factor productivity, this has an important theoretical and practical significance.Firstly, this paper use the Gene coefficient to measure the human capital inequality of our country from 1996 to 2013, and study the typical facts of country’s human capital inequality. Finding the difference of our provinces’ human capital inequality is narrwoing, the differences of our country’s regional human capital inequality is very big, human capital inequality and the average human capital is negatively correlated, human capital inequality and the ratio of male to female is negative correlated.Secondly, based on the existing literatures,this paper analysis the effect of human capital inequality on total factor productivity, finding that human capital inequality affect total factor productivity through the communication between the individual, the cooperation among labors, the matching between technologies and labors, the efficiency of resource allocation, and spillover effects. The spillover effect shows that the impact of human capital inequality on total factor productivity is positive, while other mechanisms show that the impact of human capital inequality on total factor productivity is negative. As a result, how the human capital inequality affect the total factor productivity still need empirical analysis.Finally, this paper empirically tests the relationship between human capital inequality and total factor productivity by using the provincial panel data of China from 1996 to 2013. And finding the following viewpoints:First, the effect of human capital inequality on total factor productivity is affected by the average human capital, and the effect of the average human capital on total factor productivity is affected by human capital inequality. Specifically, human capital inequality will affect total factor productivity, but the influence direction and size is affected by the average human capital. When the average human capital is very low, human capital inequality has a positive impact on total factor productivity, while the average human capital is not very low, human capital inequality has a negative impact on total factor productivity, and the higher the average human capital, the greater the impact of human capital inequality on total factor productivity. The influence direction and size of the average human capital on total factor productivity is also affected by human capital inequality. When the human capital inequality is very large, the average human capital has a negative impact on total factor productivity, when human capital inequality is not large, the average human capital has a positive impact on total factor productivity, and the smaller the human capital inequality, the greater the impact of the average human capital on total factor productivity.Second, high-quality human capital is an important factor affecting the total factor productivity, and human capital inequality has an positive effect on total factor productivity when the average human capital is low, that’s because spillover effect of the high-quality human capital. When the average human capital is not very low, high quality human capital and human capital inequality is negative correlated, but when the average human capital is low, high quality human capital and human capital inequality is positive correlated. In the composition of human capital, only the high quality human capital has a significant promoting effect on total factor productivity, while other human capital has no significant effect on total factor productivity. After considering the high quality human capital, human capital inequality only has a negative impact on the total factor productivity. Therefore, when the average human capital is very low, the human capital inequality has a positive effect on the total factor productivity, is because of the role of high quality human capital.