A Cointegration Analysis On The Human Capital And Economic Growth Of Wuhan City

Economic growth plays an important role both in improving people’s living standards and in raising the overall international power. Human capital, as one of the important factors that affecting the economic growth, Schultz and Becker, who has proposed in the1960s, catching the attention of the economics profession at home and abroad. Wuhan City, as the national "12th Five-Year" development areas and central China’s largest city and central city, with a lot of talented, higher educated resources, should lead the Central region. As all this, we have to pay attention to the role of human capital played in the economic growth in the framework of the "knowledge economy’Therefore, in order to study the impact of human capital of Wuhan City to Wuhan economic growth, the mechanism of action and mechanisms, we use statistical and survey data of1953-2010years in Wuhan City, and study the relationship between Wuhan City’s economic growth and the total stock of human capital, primary human capital, secondary human capital, advanced human capital, and their roles in the mechanism. Through the establishment of the vector auto regression (VAR) model, E-G cointegration test, Johansen cointegration test, impulse response function and methods of decomposition on the basis of this analysis, results show that:economic growth and the total stock of human capital as well as other levels of human capital, have a long-term cointegration relationship, and find that the stock of human capital has a significant positive effect to the economic growth. Secondly, the impact of advanced level of human capital on economic growth is relatively small in the short term, but it gradually increasing in the long run, more than the contribution of economic growth itself, secondary human capital and the primary human capital. Finally, the variance decomposition results further show that, overall, the impact of advanced level of human capital, the secondary level of human capital and the primary level of human capital on economic growth in Wuhan City are more significant, but secondary level of human capital promote Wuhan City’s economic development mostly. The impact of primary level of human capital on economic growth is very small and negative. Its policy implication is that vigorously accelerate the training and the introduction of high-level human capital; actively promoting the secondary human capital, especially in vocational secondary cultivation; deepen the continuing education of primary human capital; However, the most fundamental policy is the effort to create a good environment for innovation and entrepreneurship, thus attracting and retaining talent person actively.