An Empirical Study On China’s Higher Education Expenditure And Economic Growth

Education is the most important factor in forming the human capital, and humancapital plays a key role on economic development. This paper applies productionfunction method to analyze the contribution of higher education expenditure toeconomic growth. The contribution of higher education expenditure to economicgrowth is larger than that of labor and smaller than that of capital. This article usesempirical analysis, the correlation of causality and long-term equilibrium, whichdiscovers that the higher education financial expenditure has a significant influence onthe economic growth and the relation between the expenditure and economic growthshows a stably positive effect trend. But through the Granger analysis, it finds noobvious causal relationship. Based on a comparative analysis of the relation betweenthe higher educational financial expenditure and the regional economy, there is nopositive relationship between them. In addition, the thesis applies gray relationalanalysis method to analyze the relation between the higher education financialexpenditure in our country and industrial structure. It shows that the higher educationexpenditure plays a vital role on the adjustment, optimization and upgrading ofindustrial structure. We should accelerate the reform of the Higher Education Financein China, build a multi-investment in education system, and improve the researchmechanism so that the higher education can promote the economic development in abetter way.