Growth channels of human capital : A Chinese panel data study

This paper studies the growth channels of human capital using the provincial level panel data in post-reform China. Specifically, it aims at distinguishing between the factor-accumulation channel, whereby human capital augments production as an input factor, and the productivity channel, whereby human capital affects output by raising total factor productivity. Our system GMM estimation results support the hypothesis that different types of human capital affect economic growth through different channels: Basic human capital contributes to growth via the factor-accumulation channel and advanced human capital via the productivity channel, both individually and simultaneously.