New Evidence on the Contributions of Human Capital to Chinese Provincial Economic Performance

The previous chapter provided an overview of the extant empirical studies on the contributions of human capital towards economic growth in China. Many of the findings appear to contradict each other. While some studies found human capital to have made a positive and significant contribution1 towards economic growth, others found a zero or even negative contribution. There are at least three reasons for such differences between studies. First, different studies use different measures of human capital, often only using one type of human capital such as enrolments at the secondary level. Second, studies use different levels of aggregation. Some studies analyse aggregate data for China, while others divide China into broad geographical areas, for example, coastal, central, and western provinces. To complicate matters further, some studies include provinces in one geographical area, whereas others may include the same province in another geographical area.2 Third, studies often use different econometric methods and specifications. All of these differences make it difficult to draw firm conclusions from the available studies.3