The Impacts Of Human Capital On Service Industry Economic Growth

With the development of times, service industry plays important role in economic growth which has attracted increasingly attention of the scholars and experts from all over the world. Reality and r esearch showed that: the development of service industry is the main reason to keep the sustained economic growth of a country or a region. The higher the proportion of the value added of service industry in GDP, the higherdevelopment level of countries. It can be said that the development of services represents overalllevel of economic development in a country or region. By the en d of the third quarter of 2015, the valueadded of services accumulation accounted for 51.41% of GDP in the first three quarters. Although there is a great improvement in comparison with 23.4% in 1978, however, China's service industry development is st ill lagging behindthe other developed and developing countries in the world. A large nu mber of studies have shown that human capital promotion can effectively increase the output value and promote service industry structure optimization and upgrading.However, there are few articles on specific research of ser vices classification.Thus, this article adoptsaccording to the consumption object the servicescan be divided into consumer services and producer services, respectively, to study the effect of human capital for them.First of all, the first part of this paper introduces the method of the classification of services. Secondly, explaining the conceptand coverage of consumer services and producer services.Then the general condition of the development of Chinese service industry by a chart data which shows the recent 20 years(1995-2014), including changes of industrial valueadded, situation as a share of GDP, industry structure and employment. At the beginning of the second section introduces the theory of human capital, human capital source channel; And then elaborated on t he impact of h uman capital on econo mic growth related theo ries and models; also use charts show situation of human capital investment in the past 20 years in China at last of this section. The third section is the empirical analysis part, study expenses fixed number of year of average education,state of financial educationalfunds expenditure and proportion ofthe level of be educated in the employment, by 1995-2014 panel data of 28 provinces and cities across the country, combining with the economic growth model of Solow and Lucas,the influence ofservice industry, consumer services and producer services.The results showed that the average person fixed number of year of th e education, state education funds investment, higher education employment proportion has a significant positive effect on the valueadded of services. The greater proportion of education funds in vestment andthe d egree of elementary education in the employ ment population,for the v alue of consumer services, the more positive influence. For producer services, the proportion of the average educated years, education funds investment and well-educated-labor has significant positive influenceto its output value. Last sectionis theresult of empirical analysis;present the author's some humble opinion on the development of service industry.We provide empirical analysis on improving the averag e education years and increasing national education funds investment, as overall service industry, can largely improve the output. The higher proportion of well-educated employment,the greater service industry output will be. For consumer and producer services, increasing education funds, to some extent, can increase both the output.Meanwhile, to consumer services, the low-educated employment gets larg er contribution to the output. To produce r services, how ever, the welleducated employees can bring more great benefits. In conclusion, not all industry ask employment has the high degree,for some low-skilled industry, too muchlonger duration of the education or too much higher level of education will shorten the time of their work in society to decrease some industries output value. As a result, rationally distribute labor force, adjust the structure of service industry and optimize the allocation of resources, make the human capital fully playedand show their maximum effectiveness.