Empirical Analysis Of Human Capital Contribution To Economic Growth

In our country, the disparity of economic growth appears and develops fast between different regions, but people pay to much attention on material capital to regional economic disparity while ignoring the impact of human capital to regional economy. We known human capital is an important factor to ensure the rapid and stable growth of national economy growth, it can often explain the reason why regional economy disparity exist. Therefore, further study of human capital on regional economy and to analyze how the factor related with human capital affect economic growth both has a very important practical significance.The paper applies the combination of quantitative analysis and qualitative analysis to analyze contribution of human capital to economy growth in Hunan and Sichuan provinces. Firstly, based on theories like human capital and economic growth theory, human capital and regional economic disparity theory, the paper forward an empirical model for analyze the relationship between human capital and economic growth. Secondly, collect and calculate the data like production, material capital, labor force and human capital stock of Hunan and Sichuan provinces from1982to2007.Based on the data, regression analysis is done and the study found that, the elasticity of material capital in two provinces are both higher than human capital, and the rate contribution of material capital, labor force, total factor productivity are also higher than human capital which shows that the two provinces is still mainly rely on material capital investment stimulate economic growth. At the same time, compare with the data of Hunan and Sichuan provinces accordingly, we find out the total factor productivity contribution of Sichuan is lower than Hunan and the material capital contribution is higher than Hunan while the human capital contribution is slightly lower than Hunan.The result shows the economic growth of Sichuan province depends more on the material capital investment, and the contribution of human capital to economic growth is much lower. Contrast with Sichuan, the contribution of science and technology and human capital in Hunan is much higher, specially the science and technology play an important role. Hence we come to the conclusion that contribution rate from human capital in middle area is better than western area, the most key factor that restrict regional economic growth is the level of human capital. Therefore, the two places should increase human capital investment and stock based on their own economic growth mechanism and economic development mode so as to promote regional economic growth and reduce regional economic disparities.