Study On The Effects Of Human Capital On Economic Development During The Transition Period: Theoretical Analysis And Empirical Research On JiangXi Province

China has been in the period of economic transition since economic reform in1978. The main missions of economic transition are bringing about two fundamentalshifts: from planned economy to market economy, from extensive economy growthpattern to intensive growth pattern. In fact, a certain research shows that China hascompleted the first turn successfully about 2000. If it's said that the emphasis hasbeen put on the reform and transition of economy system in the last 20 year, then itwill be a new turn of tradition from extensive economy growth pattern to intensivegrowth pattern in the following 15 years.The modern human capital theory that sprang up in 1960s and the endogenousgrowth theory that sprang up in 1980s caused economist' high concern. The twotheories tells us human capital and technology progress are the main endogenousdrive for sustained development, and give developing country (region) direction andtheoretical bases for formulating catching-up strategies.The aim of researching the thesis is to analyze the effects of human capital oneconomic development in the period of economic transition based on theoreticalanalysis and empirical research of JiangXi.THEORETICAL ANALYSISAt first, it analyses effect mechanism of human, capital on economic growth.Human capital is the one of productive factors, which can bring directly economicgrowth. The character of human capital's high return can increase household's income,and then drive consumption and expanse internal market. Human capitalaccumulation needs investment, which can boost related industries. Higher humancapital can not only improve resource allocation efficiency, and enhance theconsciousness of scientific development, but also prolong labor time, improve laborquality, and increase economic value. Human capital can promote the progress oftechnology, and push the transition of economic growth pattern.The second, it analyses effect mechanism of human capital on technologyprogress and the transition of economic growth pattern. Human capital is the greatsource of technology innovation and progress, the necessary condition and foundation of technology diffusion and application, While, technology progress can improveproductivity, adjust production structure, transform economic growth pattern. Itsdiffusion and spreading can speed up accumulation of knowledge, shape benign circle,and then bring about a sustained and healthy development.The third, it analyses effect mechanism of human capital structure onemployment and production structure. With regard to industry, human capital is thegreat factor of causing labor transition from agriculture to senior industry, theindustrial difference of human capital rationalizes the structure of production byallocating employee and improving productivity.At last, it analyses the importance of human capital investment for sustained andhealthy development. Nowadays, investment on human capital is the inevitableselection for economic growth, and it is the significant way for increasing householdincome and counter-poor.EMPIRICAL RESERCHAt first, it analyses the factors', such as human capital, share of contribution toJiangxi' economic growth. Using for endogenous growth theory's ideas on buildingmodel, it established dynamic production function consisting of aggregation ofphysical capital, fixed assets investment, employee, human capital and TFP. Theinnovations of the function are: the first, thinking about quality of physical capital, itis broken up into two pats: aggregation of physical capital and fixed assets investment;the second, thinking about the effect of human capital on economic development ismore and more significant in the period of economic transition, it considers theelasticity coefficient of human capital is the function of time. It adopts ridgeregressive method to estimate parameters in order to banish multicollinearity. Theresult shows that the elasticity coefficient of JiangXi's human capital is 0.59 in theperiod of from 1980 to 2005, and it is the biggest with increasing trend 0.01 per year,compared with physical capital and simple labor. The contribution of physical capitalto economic growth is 47.8%(the aggregation's is 26.65%; the investment's is21.15%). The contribution of simple labor is 8.6%, human capital's is 17.63%, TFP'sis 25.97%. It belongs to comparatively intensive economy growth pattern.The second, it counts technology efficiency and progress of Jiangxi from 1980 to2005,and builds the econometrics model between human capital and technological progress, the result of which shows human capital grows with 1% while technologyprogress with 0.834%. And then, using path analysis, it is concluded that the indirectcontribution of human capital by affecting technology progress is 7.77%, which, in away, portrays the internal relations among human capital, technology progress andeconomic growth.The third, it empirically analyses effect of human capital structure onemployment and production structure. By unit root test, the employee and productionof the third industry are 2-degrees integration; the others are 1-degree integration.And the industrial human capitals are Granger Cause of the primary and secondindustrial employee and the second industrial production, while it takes cointegrationanalysis. So it establishes the long-term equilibrium models and error correctionmodels between human capital and employee & production. According to long-termequilibrium, the significant factor of the primary industrial employee is the secondindustrial human capital; the significant factor of the second industrial employee isthe primary industrial human capital, with time lag 2 or 3 years; the significant factorof the second industrial production is the primary industrial human capital. What ismore, It is also known, from the ECM, it is great significant between the industrialemployee & production and its human capital, which, far and away, confirms theviewpoint that the human capital is really the endogenous factor of the economicaldevelopment.At last, it analyses the need of human capital to the development of economy ina new turn of economic growth period. It fixes JiangXi's growth speed 11% from2006 to 2010, 8% from 2011 to 2020, and forecasts relevantly physical capitalaccumulation speed by econometrics model between aggregation of physical capitaland production, that is 15.64% and 13.08%. By forecasting population arid observingchanging rule of labor participation rate, it concludes the growth speed of employee is-0.77% from 2006 to 2010, -1.03% from 2011 to 2020. On the condition ofreasonable supposition, it concludes the human capital need of economic growth inthe new turn of economic transition is 11.99 till 2010(per capita who receiveseducation is 9 years), about 14.5 till 2020.Based on theoretical and. empirical analysis, it puts forward to four policysuggestions which have a significant effect to economic development in order to realize a new transfer successfully by bringing human capital into full play. The firstis to command the economy and society development with scientific developmentconcept; the second is to improve the region creative ability and transfer economicgrowth pattern; the third is to exert the comparative advantage of human resource andoptimize economic structure; the last is to upgrade human capital, and plan theharmonious development of city and countryside.