Research On The Contribution Of Education Investment To Economic Growth In East China

The new economic growth theory believed that the human capital, technology advancement or knowledge is the endogenous essential factor and the important engine of economic growth and economic development. As the most main way of the human capital investment, educational investment may influence economy growth through improve the quality of workers, promote technological progress, optimize the industrial structure, and so on. From1995to2008, the total quantity and various types and levels of education investment achieve significant growth in East China. Studies the concrete function of education investment in this area affect on the economic growth during this period, and made available recommendations how education investment play the role of promoting economic growth better in the future, these have the vital significance especially facing economical reforming, the industry restructuring, and maintain the momentum of rapid economic growth tendency at present.This paper defines the concept of education investment and other related at first, and reviewed education investment theory, economic growth theory. In addition, this paper described the mechanism that education investment affects on economic growth. Based on the summary of the previous studies, this paper proposed the scope of this study.Secondly, this paper summarized and analyzed this area’s current situation of education development and education investment during this period from many aspects, such as educational investment total quantity, educational investment structure, etc. Then this paper adopted static panel data model to estimate the contribution of this area’s total quantity and various types and levels of education investment to economic growth; constructed the dynamic panel data model and used First-differenced GMM to measure hysteretic effect of this area’s total quantity of education investment to economic growth; analyzed the regression results in depth at the same time.The research on the contribution of education investment to economic growth in East China indicates that:from1995to2008, the area’s total quantity and various types and levels of education investment have the remarkable positive function to the economic growth; compared in physical capital investment, education investment is higher contribution to economic growth; the contribution of various types and levels of education investment to economic growth existence difference, looking from various types and levels of education’s investment benefit, the medium vocational education investment benefit is highest, while higher education which hold the biggest investment ratio in total quantity existence the prominent question of low investment benefit; The contribution of total quantity of education investment to economic growth has the obvious hysteretic effect, lags an issue to have inconspicuous’crowding-out effect’to the economic growth, lags two issues have the obvious positive function to the economic growth.Finally, according to the empirical research findings and the area’s actual situation of education investment, this paper proposed to increase education investment, optimize investment structure and other policy recommendations.