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Empirical Analysis of Education to the Economic Growth in China

Author: WuZhiLiang
Tutor: ZengZhaoFa
School: Hunan University
Course: Statistics
Keywords: economic growth education comprehensive index output elasticity panel data quantile regression contribution rate
CLC: F124
Type: Master's thesis
Year: 2011
Downloads: 150
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Abstract


Economic growth theory has been one of the most important content of economics.Maintain the economic a sustained growth and a healthy development is the main goalof national economy. Human capital theory and the new economic growth theory hasproven that the level’s raising of human capital and technological progress is thefundamental power of economy sustained growing. In our country, labor resources areabundant and natural resources are shortage. Education plays a key role in how to turnthe abundant labor resources into human capital advantage. Thus, this paper choose theperspective to research education’s real effect on economic growth in our country hasvery important practical significance.Firstly, this paper reviewed the relevant research achievements of domestic andforeign scholars, analyzed the present situation of the development of education andthe economy in China. Then, this paper using the panel data (contain four indicators:gross domestic product, the initial labor input, material capital and the educationcomprehensive index) of the31provinces from1997to2009, use the method ofcluster analysis divided the31provinces into four classes, and for each groups, use theextended C-D production function model to estimate the output elasticity whicheducation composite index on the economic growth. For reflect the change rule of theoutput elasticity which education composite index on the economic growth in differenteconomic level, this paper using panel data quantile regression model to analyze thisquestion. This paper’s main conclusions are as follows:(1) The whole contribution ratio of education composite index in variousprovinces on economic growth rate is low, and there are bigger differences between the31provinces. Economic growth is mainly pulled by the material capital investment,relatively, education has played smaller role. China’s economy is still in the stagewhich economic growth are mainly based on the material capital consumptionextensive, but relying on technology progress and the raising of knowledge level topromote the economic growth is very low.(2) During1997and2009, education composite index in Beijing, Shanghai,Tianjin three municipalities directly under the central government have been a leadingposition in China, compared to the three municipalities, each rank education has largerdevelopment space in other provinces. (3) With the quantile points improved from0.1to0.9, the output elasticity ofmaterial capital stock played to economic growth is more and more big, but the outputelasticity of education comprehensive index played to economic growth is smaller andsmaller. It reflects that with the economic level from low to high, our economic growthdepends on the investment of material capital increasingly, but not pay enoughattention to the technology progress and human capital.Combined with the conclusions, this paper analyzed the policy implications. Andthis paper given the research ideas and methods about how to estimate the indirecteffect of education on economic growth and how to analyze the role of education onupgrading of the industrial structure.

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CLC: > Economic > The world economic profiles,economic history,economic geography > China's economy > Economic construction and development
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