Research On The Relationship Between Local Public Human Capital Expenditure And The Regional Economic Development Gap

China’s economic construction has achieved world-renowned achievements in more than forty years of reform and opening up.Its overall national strength has been significantly enhanced,and the people’s living standards have been gradually improved.However,behind the rapid economic growth,the disparity in economic development between regions continues to widen,which will inevitably affect the comprehensive and balanced development of China’s economy,which is an unavoidable and important real problem for China’s economic and social development.From the perspective of long-term development,human capital in each region is a stable driving force to support regional economic development.The amount of human capital in each region determines to a certain extent the changes in regional economic development and development gaps with other regions.Therefore,all regions must give full attention to the accumulation of human capital.For local governments,the investment of human capital is mainly manifested in the expenditures related to the accumulation of human capital in public expenditures,such as public education expenditures,public health expenditures,and so on.Based on the above discussion,can it be concluded that the higher the public human capital expenditure,the better the regional economy will develop? This article explores a completely new perspective to answer this question.Obviously,in a large country with a unified market,this question needs to be studied and analyzed based on the premise of human capital liquidity.Because human capital is mobile,after local residents receive government human capital investment,human capital is increased,and labor mobility is enhanced.They may choose to find employment in other regions with more employment opportunities and higher incomes,although this has a negative impact on the country.The overall economic growth is favorable,but in fact,it has led to the transfer of fiscal expenditures in less developed regions to developed regions,which constitutes the fact that the less developed regions subsidize the developed regions.When human capital itself is a constraint on economic development in less-developed regions,the outflow of labor forces with more human capital may restrict economic growth in less-developed regions,leading to a widening gap in economic development between the less-developed and developed regions.It can be seen that public human capital expenditure has a strong positive externality due to the cross-regional movement of population.Under the same conditions,local governments in less-developed areas will naturally lack the motivation for this expenditure.Human capital in less-developed regions cannot be fully invested and the stock is insufficient.In the end,it will lead to the lag of economic development in the region,thereby forming a non-benign cycle.The result is naturally a growing gap in economic development between regions.Based on this,this article explores the relationship between local public human capital expenditure and the economic development gap between regions in the context of the spillover of public human capital expenditure benefits space,and proposes several targeted policy recommendations.Based on the research direction,this paper first divides the existing relevant literature in the academic world into three aspects: the local public expenditure structure bias,human capital and regional development gaps,labor mobility and regional development gaps,and a more systematic review.Secondly,the mechanism of the research between the subjects is divided into the basic analysis of the behavior of local government fiscal expenditure,the mechanism of local public expenditure on the development gap between regions,the mechanism of local public human capital expenditure on labor mobility,and labor mobility on regional development.The mechanism of the gap’s four dimensions is analyzed at the theoretical level.Third,characterize the basic facts of China’s local publicexpenditure and the development gap between regions.The basic situation of economic development in China’s regional public expenditure and labor migration areas can be intuitively obtained through data charts.Based on the above analysis,this paper selects the panel data of 31 provinces and cities in China from 2003 to2017,and sorts them into three categories in the eastern,central,and western regions.The establishment of a VAR model will affect public human capital expenditure and economic development among the three regions.The relationship between the gaps is empirically analyzed.Based on the impulse response and variance decomposition,it is concluded that,based on the background of labor mobility,the increase in the proportion of public human capital expenditure is conducive to reducing the economic development gap between the three regions of China.Establishing a least squares regression model for the eastern,central,and western regions,through the regression coefficient,it is more intuitive to reflect that the increase in regional public human capital expenditure is conducive to regional economic growth.At the end of this article,based on relevant analysis and conclusions,a number of policy suggestions are provided to promote coordinated economic development among regions in China.