The Research Of Behavior Of Investment Constraints And Insufficient Investment In Rural Human Capital

At present, because of the lack of the investment, the level of our country’s rural human capital is very low, which not only affects the development of the country economy, but also causes the employment problem of the immigrants from rural to urban areas. Followed by these problems mentioned above, the income gap between urban and rural areas may be expanded further and that would affect the establishment of the harmonious society.So far, many researchers have done a lot of research on the rural human capital investment from different angles. In this paper, I argue that the key reason for the existing shortage of the rural human capital investment comes from all investors:the family, the enterprises, and the government. All the investors would do their investment by the principle that they want to maximize their benefits under the existing constraint conditions, while each investor has different motive and benefit functions. And we should see that:every individual’rational behavior led to the shortage of the rural human capital investment.The main content of this paper include the following sections:Firstly I would present the background of this paper and clear the assumptions. On the other hand, the innovations would also be summarized.In the second section, after summarizing the existing theories and the studies on our country’s rural human capital investment, I think that the current domestic studies on human capital mainly contain two parts:spreading the Western theory on human capital and explaining some economic phenomena. Meanwhile, there are still many insufficient points for the studies on rural human capital investment.Few research subjects:most empirical studies were done around the relationship between the investment on rural education and rural economic growth. Even for the research on the rural education investment, almost all studiers only focus on the contribution rate of the education investment. However, few economists studied such subjects as how to improve the level of our rural human capital investment.Unclearly premises:most researchers quote the Western theory while ignoring that our country’s urban-rural characteristics obviously differs from the Western countries;Unsufficient dynamic or conparative studies.The studying angles are narrow:almost all studies show that the rural human capital investment is not enough, but the reasons for that haven’t been explained well so far. So we can see that few researchers proposed feasible measures because of the five existing insufficient aspects mentioned above. And then, I would analyze the individual human capital of the rural labor force in the third section, which is affected by the income and the preference. After analyzing that, I sum up four existing problems as followed:The first is that the total investment is low; with the growth of the income, the human capital investment of our rural labor force also improves. However, the total investment is still low compared with that of the urban area.The second is the irrational investment structure of rural human capital, compared with the growing income and the falling down food consumption. Meanwhile, other consumptions are rising, such as medical care and entertainment. But we should see that the rising speed is not fast.The third is that income elasticity of demand and income elasticity of price are very small; none of that two absolute values is more than zero point five, which reflects that the investment of rural human capital is constrained by the current income and the price.The fourth is that the gap between urban and rural areas of the human capital investment is widening; as we all know, the income is generally lower in the rural area. And on the other hand, more labor force in the rural area incline to invest in some short-cycle projects, not human capital, because of their special preferences. Due to that fact, the gap of human capital investment between the urban and the rural area becomes larger. In the next section, I would study the behavior of the enterprises on rural human capital investment. Under a certain framework in which the demand model of the enterprises would be modified by the theories, the cost should contain enterprise’s human capital investment on the rural labor force, and the extra benefits brought by that also should be put in the analyzing framework.At current stage, the labor market is a buyer’s market and the employment contract is seldom well done. So we can see that the enterprises haven’t performed well on the rural human capital investment, especially on the medical expenses and so on. After analyzing the behavior of the enterprises, we would stand from the angle of the government. According to the model learning from the self-organizing theory in Physics, we can know the importance of the government’s performance on rural human capital investment. In our rural areas, the level of the human capital is seriously low in many aspects. And then I would point out that the special urban-rural strategy and the deviation of the government policy are the most important reasons for the shortage of our rural human capital investment.At the end of this article, I would summary the whole paper and suggest several measures to improve the level of our rural human capital investment:encourage the government to draft policies to foster the human capital; stimulate the enterprise to promote the human capital investment; increase the incentives of the rural labor force to acquire human capital themselves.