Research On The Influence Of Trade Liberalization On Human Capital Investment In China

China entered the World Trade Organization(WTO)on November 10,2011,it’s a historic event of China is integrated into the world economy and has a profound effect on China’s trade.Since then,China’s import and export trade has been booming,ranking as the second largest economy and the largest trading country in the world,and international trade occupies an important position in Chinese economic.With the advancement of the process of trade liberalization,the traditional trade became weakless,so the trade need to be improved.Global economic growth is weak at present time,the foreign trade situation is very serious.So in September 2018,China announced that it would take further steps to reduce tariffs on imported goods and expand imports.The key to promote the transformation and upgrading of trade lies in human capital investment,and the foundation of foreign trade development is innovation.This process requires a higher level of human capital investment and more supply of highly skilled labor.Therefore,it is of great practical significance to study the influence of trade liberalization on human capital investment in China,which is helpful for us to make better use of the opportunities of trade liberalization and to further improve the level of human capital.By using the year of 2005 microscopic data to construct the birth queue,combined with the tariff data at the prefecture level,our paper empirically examines the influence of trade liberalization on the investment of human capital in China by using the method of difference in difference.The results show that trade liberalization has a significantly increased on the enrollment rate of senior high schools,so the investment of labor force in human capital is growing.This effect remains robust after excluding a number of other policies.The mechanism analysis shows that trade liberalization increases human capital investment mainly by reducing opportunity cost and relatively improve the return on education.This provides a policy reference for China to liberalize imports and further expand the level of opening up.