Empirical analysis on education investment and economic growth in China

摘要

According to new economic growth theory, the human capital and the technological progress are the endogenous variable of economic growth, while education is the main channel of the human capital accumulation and technological progress. This paper analyses the relationship between education investment and China's economic growth which uses the method of Johansen co-integration test and Granger causality test and selects the related data from 1999 to 2003. The result of empirical analysis show that even though the education investment and economic growth have their own fluctuation rules which may not be agreement in the short term, there's still a long-term stable and equilibrium relations between them. Education investment indeed promotes the economic growth, however, China's high level economic growth sustaining nearly 30 years has not brought a corresponding increase in education investment.