Market, Human Capital Accumulation And Economic Growth In China

Demographic Dividend and economic growth has been one of the hot issues of academic concern, and to some extent, these can be used to explain the economic development of China’s reform and opening up. Chinese rapid changes in population forms the feature of "old before getting rich", facing the first demographic dividend disappear prematurely, and the second development demographic dividend is difficult. Actually the first demographic dividend just rely on more labor factors of production inputs for economic growth in a given period. As for the second demographic dividend, more important is to develop the source of sustainable economic growth, that is to say, through the accumulation of human capital and institutional change to improve the TFP during demographic dividend development stage. In the current era of knowledge economy, more and more scholars put human capital into economic growth model, so that after the reform and opening up of China’s sustained economic growth has been more reasonable explanation. But this model inclusion of human capital does not introduce market-oriented reform.In this paper, we base on extended Solow model which includes human capital, treat accumulation of human capital as the core, and introduce the effects of the market-oriented process into economic growth model. We point out that China’s economic growth depends on the market and human capital accumulation, and the driving force comes from not only the workers to master new technologies, but also from the improvement of capital stock and human capital efficiency. So establish economic growth model and draw a steady state equilibrium. Then based on the theoretical model, we construct the empirical econometric model using fully modified least squares method(FMOLS) and panel quantile regression to do the empirical analysis. Finally, make some feasible proposals for the further market-oriented reforms, human capital etc.