The Relationship Between Human Capital Investment And Regional Economic Growth

Throughout China’s economic development, China is in a transition period from investment driven to innovation driven. During the period of investment led development, the competitive advantage of the country lies in the development of basic production factors and the willingness and ability of the government, the enterprises and the residents. In the innovation-driven stage, the advantage comes from specialized factors of production and continuous innovation. Therefore, it is of vital importance to make good use of the various factors of economic development, which will play an important role in the transformation of the region to play its own competitive advantage in the future. Human capital is the key factor to improve the quality of economy. Increasing human capital investment and analyzing the contribution of human capital to the economy is not only the need of economic growth, but also the important issue of the sustainable development of national and regional economy.Firstly, the paper raised the issue to be studied and learned the research results of experts and scholars at home and abroad. On this basis, the basic theories of human capital investment and economic growth are summarized. Then through the analysis of Shandong, Henan, and Shaanxi provinces of human capital investment and economic growth,it proposes core production function model, collects and calculates the index data of provinces during the period of 1997 to 2014 total output, physical capital input, the amount of labor, human capital investment,which are substituted into the model of regression analysis. In addition, the contribution of human capital investment to economic growth and the effect of economic growth on human capital investment in the three provinces are compared and analyzed.The analysis results show that the main driving forces of economic growth in Shandong, Henan and Shaanxi provinces are technological progress and material capital, and the contribution rate of human capital and labor to economic growth is generally low. The eastern region’s economic development and the level of investment in human capital is greater than the central and western regions and the eastern region’s economic growth of human capital promotion effect is superior to Midwest, but the speed of western regions in the human capital development has greatly improved. In different regions and different economic development stages, the impact of human capital levels on economic growth are different, that is, the contribution rate is different. But from the whole point of view, the important contribution of human capital to economic growth is beyond doubt, which can bring positive externality to the development of economy. Therefore, each region should increase investment in human capital, professional personnel training, improve the quality of human capital, and exert its effect in economic growth, especially in underdeveloped central and western regions, which should narrow the gap with the developed areas and achieve regional economic sustained, healthy and coordinated development.