Relationship between Scale of Higher Education and Economic Growth in China

Feixue Huang, Ling Jin, Xiaoli Sun


In order to study the problems of long-term and short-term interactional mechanism between scale evolution of higher education and economic growth in China, authors in this article are going to put forward the method of cointegration. Through selection of enrollment and actual GDP data per capita in China from 1972 to 2007, it is discovered from the empirical result that: (1) the log sequences of enrollment of higher education and actual GDP per capita in China are first-order integration; (2) long-term cointegration relationship exists between enrollment of higher education and actual GDP per capita in China, and the long-term influence between them is positive; (3) through VECM analysis, when fluctuation of enrollment in higher education deviates from the long-run equilibrium, the system will pull the state of nonequilibrium back to the state of equilibrium with an adjustment rate of 7%; (4) based on impulse response function and variance decomposition, it is proved that one unit positive impact of higher education scale can lead to its further expansion; one unit positive impact of actual GDP per capita can also play a driving role to scale of higher education within a short period of time, but may restrain it in the long run. Conclusions and suggestions: (1) expansion of scale of higher education in China should correspond with economic growth; (2) to improve the utilization ratio of resources in higher education should not only expand in size, but should also adjust structure of higher education.

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