The Research On Effects Of Educational Expenditure And Educational Spillover On Economic Growth

Education plays a very important role for individuals and countries. Human capital theory believes that human capital is the source of economic growth, and education is an effective way to improve the human capital and technological progress. Education has a significant spillover effect. Workers who have acquired more education have a good grasp of technique or high productivity. The spillover effect of education promotes the technical progress of social economic sectors. The importance of education has been recognized by more and more people.More previous scholars conducted their studies about what effects on the economic growth will be caused by human capital, educational expenditure and educational spillover effect. In this paper, under the premise of measuring the variance of labor force by human capital, I study the effects on economic growth caused by the educational expenditure and educational spillover, and come to the conclusion and some policy suggestions.This article has seven chapters. The former two chapters are introduction and literature reviews, they are also the background of the research of this paper at the same time.I research the relationship between the growth of government educational expenditure and economic growth by using vector auto regression model in Chapter3. Studies show that the growth rate of educational expenditure has a lagging effect on economic growth, blocking in the short term, promoting in the long-term. The growth rate of government’s educational expenditure and economic growth are granger causality. I analyze the dynamic interaction of the two based on impulse response function. After the impact of one standard deviation of the growth rate of educational expenditure, the growth rate of economic declines firstly, achieves the minimum value in the first period, and gradually recovers, peaks in the third stage, be back to its original level in the fifth period.Under the condition of labor force quality differences,I research the educational expenditure and educational spillover effect on economic growth in chapter4, and this is the main research framework of this article. The empirical studies of Chinese provincial panel data show that domestic capital, foreign capital, human capital level, educational expenditure and educational spillover effect can all have a significant role in promoting economic growth. Both Economic development level and economic openness play a positive role in promoting the Influence of foreign capital. Research on Eastern central and western regions shows that output elasticity of eastern regions is greater than central region’, the output elasticity of educational expenditure of western region is not significant. Educational spillover effect of eastern region is greater than central region’. Educational spillover effect in the western area is not significant.I study the influence of economic development level to educational spillover effect in Chapter5. Studies show that the ascension of economic development level can improve the output elasticity of educational spillover effect. This is the reason that educational spillover effect of the western region is not significant.I study the flow of human capital in Chapter6. The common reason why the output elasticity of educational expenditure, educational spillover and human capital level in western region is not significant is that human capital of underdeveloped regions flows to the developed regions. As the areas of net output of human capital, the government’s investment in education of underdeveloped regions is suppressed by regional educational spillover effect. Governments, especially governments in underdeveloped regions, tend to restrict trans-regional flow of human capital, even though the total effects of trans-regional flow of human capital to the whole society are still positive. The district government’s rational behavior will lead to collective irrationality.I summarize the whole paper and puts forward the corresponding policy and recommendations in Chapter7.1. The government should plan as a whole to use educational expenditure, and take educational expenditure effect in the short term and long term into account in the meantime.2. In practice, the government should Perfect the system of laws and regulations and improve the supporting facilities, and build a excellent hardware and software of the economic environment. This is not only can promote output elasticity of foreign capital, also can improve educational spillover effect.3. Regional government should abolish unreasonable regulations which restrict the free flow of human capital. The central government’s public educational expenditure should bias in the underdeveloped areas.