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Human Capital In China

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  • Haizheng Li
  • Barbara M. Fraumeni
  • Zhiqiang Liu
  • Xiaojun Wang

Abstract

In this paper we estimate China’s human capital stock from 1985 to 2007 based on the Jorgenson-Fraumeni lifetime income approach. An individual’s human capital stock is equal to the discounted present value of all future incomes he or she can generate. In our model, human capital accumulates through formal education as well as on-the-job training. The value of human capital is assumed to be zero upon reaching the mandatory retirement ages. China’s total real human capital increased from 26.98 billion yuan in 1985 (i.e., the base year) to 118.75 billion yuan in 2007, implying an average annual growth rate of 6.78%. The annual growth rate increased from 5.11% during 1985-1994 to 7.86% during 1995-2007. Per capita real human capital increased from 28,044 yuan in 1985 to 106,462 yuan in 2007, implying an average annual growth rate of 6.25%. The annual growth rate also increased from 3.9% during 1985-1994 to 7.5% during 1995-2007. Therefore, although population growth contributed significantly to the total human capital accumulation before 1994, per capita human capital growth was primary driving force after 1995. The substantial increase in educational attainment during 1985-2007 contributed significantly to the growth in total and per capita real human capital.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15500.

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Date of creation: Nov 2009
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Publication status: published as “Human Capital in China, 1985-2008,” with Haizheng Li, Yunling Liang, Zhiqiang Liu, and Xiaojun Wang, Review of Income and Wealth , volume 59, issue 2, June 2013, pp. 212-234.
Handle: RePEc:nbr:nberwo:15500

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Citations

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Cited by:
  1. Barbara M. Fraumeni, 2013. "Comments on "Productivity or Employment: Is It a Choice?"," International Productivity Monitor, Centre for the Study of Living Standards, vol. 25, pages 61-64, Spring.
  2. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2013. "Estimating Effects of Price-Distorting Policies Using Alternative Distortions Databases," Handbook of Computable General Equilibrium Modeling, Elsevier.
  3. Michael S. Christian, 2013. "Human Capital Accounting in the United States: Context, Measurement, and Application," NBER Chapters, in: Measuring Economic Sustainability and Progress National Bureau of Economic Research, Inc.
  4. Gang Liu, 2013. "Measuring the Stock of Human Capital for International and Inter-temporal Comparisons," NBER Chapters, in: Measuring Economic Sustainability and Progress National Bureau of Economic Research, Inc.
  5. Michael S. Christian, 2011. "Human Capital Accounting in the United States: Context, Measurement, and Application," BEA Working Papers 0073, Bureau of Economic Analysis.
  6. Chen, Ku-Hsieh & Huang, Yi-Ju & Yang, Chih-Hai, 2009. "Analysis of regional productivity growth in China: A generalized metafrontier MPI approach," China Economic Review, Elsevier, vol. 20(4), pages 777-792, December.
  7. Kleinwechter, Ulrich & Grethe, Harald, 2012. "Trade policy impacts under alternative land market regimes in rural China," China Economic Review, Elsevier, vol. 23(4), pages 1071-1089.
  8. Verbic, Miroslav & Majcen, Boris & Cok, Mitja, 2009. "Education and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth," MPRA Paper 17817, University Library of Munich, Germany.
  9. Cao, Kang Hua & Birchenall, Javier A., 2013. "Agricultural productivity, structural change, and economic growth in post-reform China," Journal of Development Economics, Elsevier, vol. 104(C), pages 165-180.
  10. Alfred Greiner & Peter Flaschel, 2009. "Economic Policy in a Growth Model with Human Capital, Heterogenous Agents and Unemployment," Computational Economics, Society for Computational Economics, vol. 33(2), pages 175-192, March.

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