International Comparative Study On Public Spending And Human Capital

As the world gradually into the knowledge economy era, human capital has become the key competition between countries, human capital investment has become increasingly important for each country.There is information asymmetry and market failure in the process of human capital investment. If it simply rely on market forces, it can’t guarantee the formation of healthy and sustainable human capital.Public spending, which is a vital means of countries to adjust the economy, plays an important role in the formation of human capital.Based on the statistical analysis on the level of public spending and human development index of the world, the G7 members and Brics countries, we found that although the developed countries and developing countries are different in investment growth, but since 2000, the world within the scope of the government present a tendency of increasing consumer spending as a whole. Based on the panel regression analysis of the public spending on education accounts for the proportion of gross domestic product (GDP) and its rate of change, the public health spending accounts for the proportion of gross domestic product (GDP) and its rate of change and the human development index (HDI) of 94 countries in 2000-2013, we found that the rate of change in public spending has significant impact on the formation of human capital, although with some time lag. In addition, the impact of public spending on human capital differs significantly with level of development.