On The Effect Of Higher Education Input In China

During the past several decades, the contribution to economic growth in China has been mainly from expansion of physical capital. However, with the drying up of natural resources little by little and quickly exploding in costs, and decreasing in population growth rate, subsequently, resources costs rises and aging of population is aggravated. Then the low-output development mode which depends on input-augmenting of physical capital and employment-expanding from young people will come to an end. The key to implementing intensive development and lifting production efficiency lies in promoting human capital through education especially higher education.With the help of current theory and literatures, Based on the evolution of higher education investment in China, the effect of higher education on the human capital, economic development and social progress has been studied empirically. The findings are as follows:Firstly, through measuring higher education effect on human capital in China, the findings show that during1952-2008, human capital stock formed from non-higher education input increases by more than300times, while human capital stock from higher education input increases by522times. However, human capital stock from higher education is far lower than theoretical stock, and there exists a large room for higher education to promote human capital in China. Secondly, there is strong positive effect of higher education input on economic growth and productivity, but the effect volume is very little. Higher education input per labor force and the proportion of higher educatee employee in labor force etc. have strong positive effect on output per labor force. However, because the proportion of higher educatee employee in labor force is very little, then in1978,1990and2008, the production value from higher educatee labor force was only1.796per cent,4.371per cent and12.213per cent respectively, therefore increasing higher education input is an inevitable choice for unearthing human capital potential and realizing the transformation in economy and society development mode. Thirdly, under general equilibrium, determinants of government finance input in higher education is the return rate of higher education investment, return rate of physical capital and resource volume etc, while influence factors of private investment in higher education is private expectation preference, rate of input-return, discounted rate of value, return rate of physical capital, the variation of input costs and risks. The proportion of government finance investment in higher education declines gradually so that raises the risk of family investment in higher education. Besides promoting higher education efficiency, declining the higher education input risk of family requires that government enhance dynamics to higher education input. Fourthly, positive analysis shows that higher education has remarkable social effect, i.e. the higher proportion of higher educatee population, the more favorable to promote social harmony and reduce social governance cost, which coincides with the discussions that economists Theodore W. Schultz and Li Yining etc. have done. More higher educates, faster is science and technology progress. However, compared with developed countries, the development of higher education in China remains huge gap, which shows the necessity to increase higher education investment.The feasibility to increase higher education input manifests as followings. In the first place, government possesses the finance potential to augment higher education input, because government finance revenue has increased swiftly during the recent years. In the second place, the potential of residents in China to purchase higher education is getting larger, since2006, resident income in China goes up quickly and the proportion of higher education tuition and fees in family income has been declining relatively.On the base of summarizing the fluctuation law of funds and opportunity costs of higher education students in China, being integrated with higher education development program, it has predicted the funds and opportunity costs in future years(2012-2017). However, there exist two big blockages in China higher education input. On the one hand, that time lag of higher education input-return and higher educatee labor force flowing from economic-backward region to economic-developed area will generate backward restriction to higher education input from government in economic-backward area, because the disequilibrium in higher education development between districts, time lag in input-return and labor force flowing-out give rise to region segmentation in input-return. On the other hand, the framework of risk and gainings of higher educate labor force restrains the enthusiasm of private input in higher education. The input mechanism of higher education in China witnesses several alterations, which undergoes that state is responsible for whole funds in elite education period; double-tracked input mechanism in market economy; the burden of state lessens and that of family increases during popular higher education period, while the risk of family input goes up. In consideration of the causes above, the question of higher education funds sharing jumps out The sharing responsibility in higher education input both between government and family and among regional governments in China has been discussed.The findings show that since2000, proportion of government share in higher education input begins to be lower than theoretical proportion from the angle of generalized input view. The investment dynamics of government finance to higher education is declining, and it is at least assured to lift by the standard theoretical proportion, which has suggested that the sharing ratio between government and family in higher education input in China should be0.433to0.567. Because knowledge updating and opportunity cost rocketing off, future input in higher education will increase quickly and public finance input should be required to grow substantially.In addition, to ensure sustainable and balanced development in higher education, the state should plan the higher education investment as a whole, on the base of giving consideration of initiatives of government of all regions, and decrease the imbalance in higher education among districts which has been resulted from input-return region segmentation.