Research On The Impact Of Human Capital On The Expansion Of Medium-income Group

While maintaining the steady development of economy in our country, the income distribution gap is increasingly wide. The lack of the medium- income group is a potential source of social instability. To expand the medium- income groups is an important source of C hina’s economic growth in the future, is a key point to build an olive- oriented social structure. How to enlarge the proportion of medium- income group? Based on the perspective of human capital, this article investigates its important role in expanding the medium-income group from theoretical and empirical analysis.Based on the research achievements on human capital and middle- income groups from home and abroad, This article firstly calculates the proportion of chian’s medium- income group from 1985 to 2012. On the basis of measured data, it is concluded that although C hina’s medium- income group showing steady growth, it’s proportion is still low and the social structure takes on a Pyramid-shaped structure. It further Puts forward to realize the transformation of social structure, to build the "olive" pattern of income distribution, the key factor is to continue to expand the medium- income group. Secondly, human capital is one of the most important research perspective of expanding medium- income group. It theoretically studies the internal mechanism of human capital for the expansion of the middle- income group, concluding that human capital is the internal driving force to expand the medium- income group. Thirdly, in order to improve the reality and persuasion of the theoretical research, it establishes the mathematical model of the human capital stock, the human capital distribution structure, the human capital investment structure and the proportion of medium- income group respectively. It empirically studies the influence mechanism and reveals the internal logic relationship on the human capital stock, the human capital distribution structure, the human capital investment for the expansion of the medium- income group respectively. Finally, using the dynamic matching development experience of the representative countries for re ference and combining with the empirical research conclusion, It analyzes the development dilemma of the human capital and furtherly puts forward the policy recommendations on solving the human capital development challenges to expand the medium-income group.The main conclusions of the study are as follow: 1. Human capital is the internal driving force to expand the medium- income groups. The development of human capital not only includes the scale enlargement of human capital stock, but also includes of the optimization of human capital structure. The human capital stock determines the ability to obtain the income of the medium- income group. Moreover, the human capital distr ibution structure determines the distribution structure of the medium- income groups, and the advanced human capital investment structure can effectively boost the scale of the medium- income group. 2. The stock of human capital is an important core element to expand the medium income group. In the long term, the human capital stock increases by 1%, the proportion of mediume-income group will expand by 0.993%. The human capital stock is the Granger cause of the proportion of the medium- income group, but the proportion of medium- income group is not the Granger cause of the human capital stock. 3. The human capital distribution structure determines the distribution structure of the medium- income groups. The human capital Gini coefficient decreased by 1%, the proportion of medium- income group will rise 3.24%. The difference of human capital distribution has a positive correlation with that of the medium- income group’s proportion between urban and rural areas.The influence of human capital on the proportion of the medium income group is different in the eastern, ce ntral and western regions, and the impact of the eastern region is the highest, followed by the central region, the West end. 4. Upgrading of the human capital investment structure can significantly promote the further expansion of the middle- income group. The primary human capital stock proportion to the proportion of medium- income groups is short of elasticity, whereas the intermediate human capital stock proportion and advanced human capital stock proportion is more stimulating to increase the proportion of the medium- income group. There is no Granger causality between the primary human capital stock proportion and the proportion of medium- income group build the analytical framework of human capital and the expansion of the middle-income groupvanced human capital stock proportion and the proportion of middle-income group respectively.The innovations of this study include: 1. This article builds a more perfect analytical framework of human capital and the expansion of medium- income group. It systematically combs the internal logic relationship between the human capital stock, the human capital distribution structure, the human capital investment structure and the proportion of medium- income group respectively, overcoming the existing literature’s defect analysis. It theoretically discusses the real effect on the human capital factor in the role of expanding the medium- income group. 2. It establishes the econometric model on the human capital stock including education, health, training and migration and the proportion of medium- income group, to make up for the lack of existing research main-ly adopting education to characterize the human capital stock, so that comprehensivly studies the influence mechanism on the human capital stock to expand the medium- income group. 3. This article first empirically researches on the human capital investment structure and the proportion of the medium- income group,which puts forward the higher level of the human capital investment structure can effectively boost the scale of the medium- income group. It is concluded that compared with the primary human capital, the medium and senior human capital is more significant to expand the medium-income group.