The Research On The Effects Of Human Capital On Economic Growth Of Five Provinces Based On J-F Income Approach

So far, almost every scholar has agreed on the point that human capital is one ofthe main elements which promote economic growth in the world. Meanwhile, theyhave been launching the empirical analysis method to probe into the effects of humancapital and come to abundant conclusions. This thesis adopted J-F income approachand calculated the human capital stock of five provinces from the perspective ofavailabilities of data. And then, this thesis proved the obvious direct effect of humancapital on economic growth and the indirect effect of the former one on the latter onewith the help of TFP.This thesis, based on the current economical situation of China, focusing on theinfluencing factors of economy, combining the existing theories like human capitaltheory, economical growth theory, J-F income approach and other populareconometric analysis methods and finally come into the conclusion that China shouldinspire and rely more on the important role of TFP on economic growth. In this thesis,the classic production function named Cobb-Douglas production function was adoptedand modified into a relatively new model. At the same time, based on the collected datasuch as GDP, GDP index, CPI index, fixed investment and fixed investment price indexduring1988to2008, this thesis calculated actual human capital stock and actual fixcapital stock and constituted panel data of five provinces by adopting perpetual inventorymethod and J-F income approach. Besides that, this thesis also launched the empiricalanalysis method and the econometric software called STATA. After adopting GLS, thisthesis found out the positive relationship between Human Capital and economicgrowth as well as the double effects of the former one on the later one.The results show that Chinese economic growth are still based on fix capital stockinvestment, which contributed more than half to economic growth; while the contributionof human capital stock and TFP are relatively low, which are less than three percent andten percent separately. Meanwhile, comparing the advanced with underdeveloped citiesby taking Beijing as a reference, the thesis found out the truth that, given the same fixedcapital stock investment, the more the city invests human capital stock, the quicker thecity’s economic grows. Therefore, it’s necessary that China should economize fixedcapital stock and increase the investment dynamics of human capital stock.