Sources of China's Economic Growth, 1952-99 : Incorporating Human Capital Accumulation
China's performance in economic growth, and poverty reduction has been remarkable. There is an ongoing debate about whether this growth is mainly driven by productivity, or factor accumulation. But few past studies have incorporated informatio...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/07/1552026/sources-chinas-economic-growth-1952-99-incorporating-human-capital-accumulation http://hdl.handle.net/10986/19587 |
| Summary: | China's performance in economic
growth, and poverty reduction has been remarkable. There is
an ongoing debate about whether this growth is mainly driven
by productivity, or factor accumulation. But few past
studies have incorporated information on China's human
capital stock, and thus contained an omission bias. The
authors construct a measure of China's human capital
stock from 1952 to 1999, and, using a simple growth
accounting exercise, incorporate it in their analysis of the
sources of growth, during the pre-reform (1952-77), and the
reform period (1978-99). They find that the accumulation of
human capital in China (as measured by the average years of
schooling for the population aged 15 to 64) was quite rapid,
and contributed significantly to growth, and welfare. After
incorporating human capital, they also find that the growth
of total factor productivity, still plays a positive, and
significant role during the reform period. In contrast,
productivity growth was negative in the pre-reform period.
The results are robust to changes in labor shares in GDP.
The recent declining rate of human capital accumulation is a
cause for concern, if China is to sustain its improvements
in growth, and welfare in the coming decade. Funding for
basic education is unevenly distributed, and insufficient in
some poor regions. |
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