Research On Human Capital Investment Based On Employment Relationship Stability

Under the framework of human capital theory, this thesis studies workers's demand for and firms' supply of human capital investment based on the employment relationship stability, discusses the determinants of firms' human capital investment and the main reason of firms' under-investment in human capital, explores the impact of firms' human capital investment on income inequality, workers' mobility and wage level, and bringes forward promoting human capital investment polices correspondingly.Labor market reforming, the center of which is promoting labor contract system, injects energy and flexibility into rigid labor market formed in Chinese previous plan economy. Labor contract system guarantees that the labor force resources are allocated effectively, and promotes the formation of the flexible labor market. The resrarch discoveres that the overwhelming majority of labor contracts signed in current labor market are short-term contracts because their durations are not over three years, labor market reforming, the changing condition of labor market supply and demand, and the increasing competition of product market are the main reasons that cause the labor contract term shortening, and the distribution of tenure of Chinese labor market is similar with that of the countries with the most flexible labor market. The formation of flexible labor market decreases the employment relationship stability inevitably.The employment relationship stability affects workers and firms' human capital investment decision directly. For workers, without stable employment relationship, they would be inclined to investing in general human capital with market value, because general human capital not only can urge them to carry on labor turnover successfully in the labor market, but also can satisfy them with the preference of increasing wage profile.