Human Capital, Human Capital Inequality And Economic Growth

Since the reforms and opening-up policies began in the late 1970s, China has experienced miraculously rapid economic growth. We should focus more on the relationship between human capital and economic growth. Some studies showed that human capital inequality was greatly related to economic growth. Based on the theory of Endogenous Growth and the theory of human capital, the paper deeply analyses human capital, human capital inequality and their affects on the economic growth of China. Firstly, the paper theoretically explained the mechanisms of their effects. Secondly, it calculated human capital using the method of computing schooling years, then took education Gini coefficient of human capital as the measurement of human capital inequality. Basing on that, it construct a countrywide and region economy growth model, and then it tested the affects of human capital, human capital inequality on economic growth using provincial panel data from 1993 to 2007. The results are as follows:The function of them is different in each region. (1) Human capital has significantly positive effect on economic growth in China. The function of human capital in eastern region is the biggest. (2) However, human capital inequality has significantly negative effect on economic growth. The coefficient in eastern region is the biggest. (3)Primary education, secondary education and higher education exert different effects on economic growth. On the basis of the conclusion above, this dissertation puts forward some corresponding policy suggestions, including strengthening human capital accumulation, optimizing human capital distribution, making full use of human capital spatial spillovers between regions, and promoting the formation of human capital market in China.