Sichuan Province, Human Capital Investment And Economic Growth Study

The theory of economic growth is an important branch of modern economicsand economic growth indicates most important economic achievement .SichuanProvince lies in the southwest of China, it has made great achievement on economicgrowth since reform and opening up, and economic growth rate has graduallyexceeded national average level that reaches 12.7% in 2004. At the same time thepaces of industrial structure adjustment quickens up. But comparing with eastern areasuch as Shanghai, Guangdong, it is a greatly laggard, furthermore its developmentfaces a lot of difficulties that the lower human capital stock and the resource utilizingefficiency are the main ones.This dissertation analyzes the stats of economic development and human capitalinvestment of Sichuan and finds the difference and absence with other citiesaccording to China statistics yearbooks, China Population Statistics Yearbook,Sichuan Statistics Yearbook and so on. And we analyze the output elasticity andcontribution rate of human capital investment for 31 provinces, cities, autonomousregion and municipality through Cobb-Douglas production function on the basis oflarge number data such as human capital, material capital, GDP from 1990 to 2000.We find that the elasticity of human capital investment is higher than that of thematerial capital investment, and their difference is varied along with region. Theinvestigation indicates that the contribution of education to economic growth doesn'tget effect instantly as we imagined before, and compared with material capitalinvestment the return of human capital investment has its peculiarity. Through deeplyanalysis by dynamic regression model it shows that only after rather long period canthe accumulative yield of education expenditure be achieved. We also find the impactof education investment on economic growth has a critical range and only the averageeducated year exceeds the upper limit of critical range the economic could make greatachievement. In the end, the cultivation and development strategies of human capitalare put forward in hope that it can provide some references for talents' training andtapping decisions of Sichuan in future.