An Empirical Analysis of the Fact That the Returns to Education Are Significantly Higher Than the Return of Capital:Based on the Estimation of the Macroeconomic Returns to Education in China Since 1978
Education is the core driving force for the high-quality development of population,and investment in education implies investment in the future.It is an important question to be answered for the long-term development of education what economic return has been brought to China by the continuous increase in educational investment over the past decades,and whether the return on educational investment is significantly higher than that on physical capital investment,such as the investment in infrastructure and equipment.By comparing investment in education with investment in fixed assets,and exploring the macroeconomic returns to education in terms of the long-term economic growth resulting from each increased unit of educational investment in the whole society,this study finds that the years between 1978 and 2020 witnessed 20.7％of the macroeconomic returns to education in China,which showed high returns on investment.At present,the macroeconomic returns to education for upper secondary education,tertiary education and graduate education in China are 27.1％,20.9％and 21.6％,respectively,which are significantly higher than 5％,the return on physical capital estimated in 2019 by the International Monetary Fund(IMF).Empirical studies show that China's educational investment has effectively mitigated the negative impact of demographic changes on the national economy.Thanks to the complementarity of human capital and physical capital,the macroeconomic returns to education failed to show a marginal decline and it was significantly higher than the returns to physical capital.Compared with the development of higher education,the macroeconomic growth resulting from the promotion of the popularization of basic education is the most significant.In the future,we need to increase educational investment,raise its proportion of the Gross Domestic Product(GDP),and preferably stress the popularization of basic education and increase the rate of the popularization of upper secondary education;and promote the transfer of government investment to education by directing social sectors to the decrease of inefficient investment in physical capital so as to make educational investment a better contribution to human development,economic growth and social progress.
educational investmentmacroeconomic returns to educationeconomic growthhigh-quality economic development
NETL
NSTL
万方数据
