The Study On The Impact Of Human Capital Investment To Farmers’ Non-agricultural Employment

As a developing country, China has a significant characteristic of the dual economicstructure. On the one hand,in the agricultural department, there is a very severe contradictionbetween farmland and labor force, because the shortage of agricultural resources, a largenumber of agricultural labor force are in the situation of recessive unemployment,and theiragricultural income is very low; On the other hand, along with China’s reform and opening tothe outside world,economic structure transition and the process of industrialization andurbanization，driven by the comparative advantage of city, a large-scale of the agriculturalsurplus labor transfer to the city, but because the restriction of their low quality level, thesefarmers have to access to the city’s informal departments,engaged in so-called “dirty, poor,hard, dangerous" type of work. In recent years, the “visible threshold”—the policy restrictionto farmers’ non-agricultural employment have been disappearing， the future farmers willeventually face the most important restraint from the "invisible threshold”, that is, therequirements of capability and the quality level of the farmers’ who want to enter thenon-agricultural employment market，And the latter will only depend on the human capitallevel of these farmers. Therefore，based on the investment of human capital, to explore theinner relations between the rural human capital investment and non-agricultural employment，and seek the ways of promoting the rural human capital investment and farmers’non-agricultural employment in the new era, makes this study has very important theoreticalvalue and practical significance.The main idea of this paper: Based on the study of the related theories and the presentsituation in our country foundation, taking the rural human capital investment and farmers’non-agricultural employment as the two research objects, respectively, in macro and micro,theoretical and empirical, reality and expectations perspectives, explains the impact of therural human capital investment to the farmers’ non-agricultural employment,and on the basisof this, try to search ways of promoting the human capital investment and farmers’ non-agricultural employment. Under the guidance of main idea of this paper, the specificsections are arranged as following:Chapter1: Introduction. Chapter2: Related theories of human capital investment andnon-agricultural employment. Chapter3: the current situations of rural human capitalinvestment and farmers’ non-agricultural employment in China, as well as the main problemsof both. Chapter4&Chapter5: In macro perspective, these two chapters theoretically andempirically analysis the effect mechanism of the rural human capital investment to farmers’non-agricultural employment. In Chapter4, in the macroscopic level, this paper expounds themechanism of how the human capital investment will influent the farmers’ non-agriculturalemployment scale, the non-agricultural employment structure and non-agriculturalemployment market wage rate; In chapter5, based on the mechanism analysis in chapter4,using the time-series data, constructing the Vector Error Correction model, to verify theimpact of human capital investment to farmers’ non-agricultural employment. Chapter6&Chapter7: In microscopic perspective, these two chapters theoretically and empiricallyanalysis the effect mechanism of the rural human capital investment to farmers’non-agricultural employment. Chapter6analysis the microscopic impact mechanismtheoretically: based on the ability transmission mechanism between human capital investmentand non-agricultural employment, according to the difference of the final effects, the authordivided the effect of human capital investment to non-agricultural employment into “costeffect” and “income effect”, providing the theoretical foundation and the framework of theempirical research in chapter7. In chapter7, based on the sorting and analyzing of alarge-scale of survey data, verifying the “cost effect” and “income effect” respectively. At thesame time, comparisons of the cost-benefit of different agricultural surplus labor non-farmemployment modes as well as before-after non-agricultural employment are further analyzed;and putting forward the innovative concept and the value of non-farm employment decisioncritical value. Chapter8: Conclusion, application and future Research prospect.According to the study of the impact of human capital investment to farmer’snon-agricultural employment, the main conclusion is displayed as following:(1) In the macroscopic perspective:The impact of human capital investment on farmers’ non-agricultural employment scale:the impact of Health care to farmers’ non-agricultural employment scale is the biggest,followed by Education investment, then the Transfer investment, the influence coefficients ofthese three variables on farmers’ non-agricultural employment scale were1.261,1.147and0.025respectively. The impact of Human capital investment to farmers’ non-agriculturalemployment income: Education investment has the biggest impact on farmers’ non-agricultural employment income, and the influence coefficient is0.917; followed by theMedical care investment, which has a negative relations with the farmers’ non-agriculturalemployment income, and the influence coefficient is0.89; the influence coefficient ofTransfer investment to farmers’ non-agricultural employment income is0.304, the impact ispositive but is minimal.(2) In the microscopic perspective:The results of "Cost effect" verification: as the human capital investment increased, thefarmers’ ability of non-agricultural employment will be strengthened, and this will cause thereduction of non-agricultural employment cost in different degrees. As for the sample offamers: the result shows that the strength of farmers’ non-agricultural employment wills, andtheir non-agricultural employment site selection, both has a strong positive correlation withhuman capital investment. The influence of Education, medical treatment, training investmentto the strength of farmers’ non-agricultural employment decline in turn, and their influencecoefficients are0.830,0.785,0.742respectively. At the same time, the impact of education,medical treatment, training investment to non-agricultural employment location choiceincrease in turn, and their influence coefficients are0.352,0.416, and0.521respectively. Asfor the sample of migrant workers: the result shows that the impact of human capitalinvestment to the preference of the migrant workers’ non-agricultural employment has a verysignificant positive correlation, in comparison, the impact of Training is the biggest tomigrant workers’ non-agricultural employment, and their influence coefficients are all above0.8, followed by Medical investment and Transfer investment, their influence coefficients arearound0.75in general, and Education investment has the minimal impact to non-agriculturalemployment, its influence coefficient is just around0.5.The results of "Cost effect" verification: the study shows that the relationship betweenhuman capital investment and farmers’ non-agricultural employment income is strong andpositive, that is, with the increase of the human capital investment, farmers’ expected incomeof non-agricultural employment and the migrant workers real income of non-agriculturalemployment will both increase. As for the sample of farmers: the impact of Educationinvestment and Medical investment to farmers’ expected income of non-agriculturalemployment is positive, their influence coefficients are both above0.9, and the influence ofthe Training investment is lower. For the sample of migrant farmers: human capitalinvestment and non-agricultural employment income has a strong positive correlation, amongthem, the Training investment has the biggest impact on their real income and the expectedminimum income of their non-agricultural job, and their influence coefficients are0.917,0.911respectively, followed by Health investment, the influence coefficients are0.904and 0.901, then for the Transfer investment, its influence coefficients is0.888, and for Educationinvestment, the influence is minimal, its influence coefficients to real income and the lowestincome expectations for migrant workers are0.575and0.570respectively.This paper examines the impact of human capital investment in education， health，training and migration dimensions on farmers’ non-agricultural employment. The result showthat, although the degree of the impact varies in different human capital investmentdimensions, but in general, whether in theoretical or the empirical analysis, the result showsthat, the increase of the human capital investment, in microscopic perspective, could help toraise the level of non-agricultural employment for famers, as well as to increase theirnon-agricultural employment income; Meanwhile, in macroscopic perspective, it also helps tospeed up the upgrading of industrial structure and the urbanization in China.