Human Capital, Economic Growth, and Inequality in China
China's rapid growth was fueled by substantial physical capital investments applied to a large stock of medium skilled labor acquired before economic reforms began. As development proceeded, the demand for high skilled labor has grown, and, in the past decade, China has made substantial investments in producing it. The egalitarian access to medium skilled education characteristic of the pre-reform era has given rise to substantial inequality in access to higher levels of education. China's growth will be fostered by expanding access to all levels of education, reducing impediments to labor mobility, and expanding the private sector.
This work was funded in part by NIH R37-HD065072 and a grant from the Institute for New Economic Thinking (INET). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
“Human Capital, Economic Growth, and Inequality in China,” (with J. Yi). Forthcoming in The Oxford Companion to the Economics of China on Human Capital, Shenggen Fan, Ravi Kanbur, Shang-Jin Wei and Xiaobo Zhang, editors. Oxford, UK: Oxford University Press. (2014).