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A study on labor mobility and human capital spillover

  • Jinghua Zhang
  • Fangwei Wu
  • Deyuan Zhang
  • Yongmin Wang
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    Purpose – The purpose of this paper, starting from a theoretical framework, is to analyze the spillover effects of human capital brought by labor mobility and their influence on the public education investment. Design/methodology/approach – Based on the endogenous growth theory, the paper establishes a regional human capital spillover model to examine the spillover effects of human capital coming along with the regional labor mobility and the changes of public education investment decision brought by the spillover effects in China. Findings – It has been found that the regional mobility of labor has made the developed areas gain the spillover benefits of human capital investment from the underdeveloped areas with their superiority of social and economic environment and restrained the incentives for public education investment in the underdeveloped areas, thus the different areas walk on a different growth path, with the expansion of the difference in the economic and education investment growth. Originality/value – This paper analyzes the possible influences from the spillover of human capital on the economic growth and educational investment and finds a high possibility for the underdeveloped areas to get into a “low development trap” of education investment. The key to solving the problem is to internalize the externalities by the active public policy, in order to realize equal education, rational investment and balanced development.

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    File URL: http://www.emeraldinsight.com/journals.htm?issn=1756-137x&volume=1&issue=3&articleid=1790032&show=abstract
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    Article provided by Emerald Group Publishing in its journal China Agricultural Economic Review.

    Volume (Year): 1 (2009)
    Issue (Month): 3 (September)
    Pages: 342-356

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    Handle: RePEc:eme:caerpp:v:1:y:2009:i:3:p:342-356
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    1. Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
    2. Razin, Assaf & Yuen, Chi-Wa, 1997. "Factor Mobility and Income Growth: Two Convergence Hypotheses," Review of Development Economics, Wiley Blackwell, vol. 1(2), pages 171-90, June.
    3. Robert J. Barro & Jong-Wha Lee, 1993. "International Comparisons of Educational Attainment," NBER Working Papers 4349, National Bureau of Economic Research, Inc.
    4. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
    5. Theodore W. Schultz, 1960. "Capital Formation by Education," Journal of Political Economy, University of Chicago Press, vol. 68, pages 571.
    6. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    7. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
    8. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    9. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
    10. Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May.
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