The Impact Of Human Capital Investment On Residents’ Consumption

In recent years, due to the severe economic situation at domestic and abroad, the absolute amount of domestic investment is rising, and the investment rate is stagnant, or even decline. As two of three stimulating economic impetus, investment and exports play a weak role on economic growth. The traditional way that investment and export stimulate the economy has been difficult to adapt to China’s national conditions. Then, people are paying more and more attention to consuming, and expand domestic demand has become a hot issue. Meanwhile, with the economic developing and natural resources increasingly scarce, as a new factor of production, human capital makes more contributions to output, and the impact of human capital on residents’ income has become increasingly prominent, and the impact on economic growth have become more sophisticated. In recent years, government investment in education and health care is also increasing. The education and health-conscious individuals and families continues to strengthen. expenditure on education and health is also increasing. In each element of human capital, education and health as an integral part of human capital, has an important influence on residents’ income and economic growth, thereby affecting the consumption level of residents.In this context, this paper studies the effects of human capital investment on the consumption of the residents, through summarizing the research literature of domestic and foreign scholars. Starting from the perspective of families and individuals, this paper selects a CHNS panel data from 2004 to 2011 to make an empirical analysis. The results showed that:(1) on the whole, human capital investment has crowded in residents consumption;(2) the education human capital investment of urban and rural residents has crowded in personal consumption. The investment in health human capital of rural residents has crowding in personal consumption, while the investment in health human capital of urban residents has crowding out personal consumption;(3) increasing the human capital investment of residents who is in the medium to high income class has the greatest impact on their consumption. From the perspective of education investment, increasing the education human capital investment of residents with middle income class has the smallest impact on their consumption. But from the perspective of health human capital investment,the increase in health human capital investment has the minimum effect on consumption for the low-income residents. Finally, according to the empirical results, put forward the policy suggestions to improve government and private investment in human capital and promote household consumption.