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THE ROLE OF HUMAN CAPITAL IN CHINA'S TOTAL FACTOR PRODUCTIVITY GROWTH: A CROSS‐PROVINCE ANALYSIS
Author(s) -
WEI Zheng,
HAO Rui
Publication year - 2011
Publication title -
the developing economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.305
H-Index - 30
eISSN - 1746-1049
pISSN - 0012-1533
DOI - 10.1111/j.1746-1049.2010.00120.x
Subject(s) - total factor productivity , human capital , endogeneity , china , economics , productivity , frontier , demographic economics , solow residual , stochastic frontier analysis , capital deepening , development economics , economic geography , growth accounting , economic growth , geography , production (economics) , macroeconomics , econometrics , capital formation , financial capital , archaeology
This paper studies the role of human capital in China's provincial total factor productivity (TFP) growth over 1985–2004. The stochastic frontier approach is employed to measure the productivity growth of Chinese provinces. Human capital is measured both qualitatively and quantitatively. In particular, enrolment rates at various levels of schooling are used to represent human capital composition. After controlling for endogeneity, we find that human capital has significant and positive effects on the TFP growth of Chinese provinces. However, when education quality is incorporated, productivity growth appears to be significantly enhanced by quality improvements in primary education only. Regional impacts of human capital are found to differ at various levels of schooling. In the eastern region of China, productivity growth is significantly associated with secondary education. TFP growth in the central region is mainly promoted by primary and university education. Yet in the western region, primary education plays the most prominent role.