Government

The Contribution Of Human Capital To China's Economic Growth

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Executive Summary

This paper develops a human capital measure in the sense of Schultz (1960) and then reevaluates the contribution of human capital to China's economic growth. The results indicate that human capital plays a much more important role in China's economic growth than available literature suggests 38.1% of economic growth over 1978-2008, and even higher for 1999-2008. In addition, because human capital formation accelerated following the major educational expansion increases after 1999 while growth rates of GDP are little changed over the period after 1999, total factor productivity increases fall if human capital is used in growth accounting as the authors suggest.

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