Education contributes to economic growth through both direct effect and spill-out effect. This paper gauges the direct effect and spill-out effect of Jiangsu's education investment to its economic growth with Feder Model. It finds out that while education contributes highly to Jiangsu's growth, the spill-out effect is not evident, neither were the factors of capital and labor. It suggests that the government, on one hand should strengthen its investment on education system, on the other hand should bring the spill-out effect of education into play by improving the utility efficiency of capital and labor.
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