The Role of Human Capital in China's Total Factor Productivity Growth: A cross-province analysis


Event details


Date & time

Tuesday 29 May 2012


Seminar Room B, Coombs Building, Fellows Road, ANU


Annie Wei, ANU
Abstract: This paper studies the role of human capital in China’s provincial total factor productivity growth over 1985-2004. We adopt the stochastic frontier approach to measure productivity growth of Chinese provinces in terms of the Malmquist TFP index, and then assess the relationship between productivity growth and human capital. When measuring human capital, we particularly focus on the composition of human capital, represented by enrollment rates at various levels of schooling, as well as education quality. After controlling for endogeneity, we find that human capital has significant and positive effects on total factor productivity growth of Chinese provinces. However, when education quality is incorporated, productivity growth appears to be significantly enhanced by quality improvements in primary education only. We also find that regional impacts of human capital differ at various levels of schooling. In the eastern region of China, productivity growth is significantly attributed to 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.

The paper is downloadable from here

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