Research On Investment Behavior And Mechanism Of Human Capital In Rural China

So much economics research shows that human capital, which unites the skills, knowledge and quality, is playing an increasingly important role in the development of economy. For a long time, the rural economic development has been slow, and the fundamental reason is that the peasants' low levels of human capital. Human capital is formatted by investing in education, skill training, health and migration. There is much constrain in the formation mechanisms of rural human capital investment, which results in that rural human capital investment is insufficient in the long term. This paper analyses the investment channels and the status of rural human capital, and then discusses the formation mechanism obstacles in rural human capital investment from the perspective of micro main action, government action and market information asymmetry. Based on the above, the paper comes to the following conclusions: Given the huge costs and uncertain benefits of rural human capital investment, rational farmers prefer physical capital to human capital. Due to the dependence and mobility of human capital, rural human capital overflow to cities, which leads to low stock level and vicious cycle of rural human capital; The government investment is also insufficient. One side, governments prefer to invest in city human capital. On the other side, powers and responsibilities between governments are asymmetric. Governments'responsibilities are fuzzy. Central government and local governments start a game. The investment of central government is so limited. Because of that GDP is the core of performance evaluation systems, local governments invest in other areas to pursuit higher return and the greatest opportunities for promotion; The information between farmers and rural human capital providers is asymmetric. So better rural human capital resources get out of the market. Finally, based on the above analysis, the paper suggests that the government should play a greater role in changing the backward status of human capital investment in the current.