Comparative Study On The Relatonship Of Human Capital Inequality And Econoi Growth Between China And Other Countries

As a great developing country, China will undergo a long process of economic growth for her achieving modernization and becoming rich. Therefore, study on the Chinese economic growth has very far-reaching significance. And new economic growth theory considers human capital as an important factor promoting economic growth, but the previous empirical studies could not support this theoretical opinion completely. The main reasons may be that the calculation methods of human capital are not perfect and the effect of human capital inequality on economic growth has been ignored in the related empirical tests. Considering above reasons, this paper improves the calculation method of population stock series in terms of educational attainments, according to which Chinese population stock series in terms of educational attainments are calculated since the founding of New China. Basing on the data of the population stock series in terms of educational attainments, the paper computes China’s average years of schooling and educational variance and takes them as the proxy variables of human capital and its inequality respectively to test their effects on the economic growth. In addition, this paper calculates the educational variance for 74 countries including China using the data in Barro and Lee (2010) and composes the related data into panel data in order to test the effect of human capital inequality on economic growth further.Empirical test provides evidence that:among 74 countries,20 countries show human capital inequality is positively related to labor productivity, which proves human capital inequality will improve productivity growth; 51 countries demonstrate human capital inequality is adversely related to labor productivity which proves human capital inequality will not hinder productivity growth; 3 countries indicate human capital inequality is not significant related to productivity.After controlling the catch-up effect, physical capital and human capital per worker will improve the productivity growth, which is consistent with previous researches, catch-up effect is significant, the wide the technology gap with USA is, the faster the labor productivity growth is. Meanwhile, the effect of human capital distribution imbalance influencing productivity is complicated, most countries are positives, certain countries are negative, minority is not significant.As to China, the result of China time series regression is the same as that in cross countries regression, namely capital per worker increase is the main source of productivity growth. Catch-up effect is significant. Human capital and human capital distribution are both positive related to labor productivity. Compared to most countries, China’s situation of education imbalance is in the left side of Kuznets Curve, that is to say, with the increase of human capital, the human capital distribution imbalance worsens, which both benefit the labor productivity growth, and the human capital imbalance’s contribution is still obvious. The paper is structured by the following five sections:The first section is introduction. Firstly, the background and significance of the study are introduced in this section. Then, the author reviews and evaluates the previous literatures on the relationship between human capital inequality and economic growth. Furthermore, the research project and the structure of the paper are given.The second section focuses on the discussion of the relationship between human capital inequality and economic growth. Taking the introduction of the concept, the proxy index and the factors of economic growth as opening of this section, the author educes the issue of human capital affecting economic growth. Basing on the concept and calculation method of human capital, the author analyses the effects of human capital on economic growth qualitatively. Furthermore, the author discusses the concept and calculation method of human capital inequality and the quantitative model analyzing the effects of human capital inequality on economic growth.The third section analyses mainly the relationship between human capital inequality and economic growth in China. At the begining,, the author sums up China’s development and current status of human capital investment since the founding of New China, including the development and current status of educational investment, educational industry and on the job training. Then, the author calculates China’s human capital inequality since 1952, analyses its variation and tests quantitatively the effects of human capital inequality on economic growth using regression method.The forth section is the most important section in the whole paper. In this section, the author mainly tests the relationship between human capital inequality and economic growth using panel data composed by the data of 74 countries. Firstly, the author introduces the selection of sample countries and data description and explains the testing methods of the panel data model. Then, the author tests the panel data model and analyses comparatively the China’s result with that of other countries’. Basing on that, China’s basic characters in the relationship between human capital inequality and economic growth are presented.The final section of the paper gives the conclusions and suggestions. The first part of this section gives the conclusions. The conclusions are:both average index and dispersion index of human capital contribute significantly to the productivity growth; Kuznets curve of human capital inequality is existed among the countries; and China is still in the left side of Kuznets curve; the effect of Chinese dispersion of human capital on economic growth is positive. According to the conclusions, the author suggests that China should support education at all levels and enhance the development of on job training, as well as optimize human capital distribution.