The Impact of higher education on economic growth in China

Abstract

This study examines the economic challenges faced by China post-COVID, particularly the slowdown in GDP growth and the impact of higher education on economic growth. It highlights the surge in master's degree applicants due to job market competition and explores the relationship between higher education and economic growth, focusing on potential nonlinear dynamics. Using master's enrollment rates as indirect labor market indicators, the study seeks to understand the accessibility of higher education and its economic implications across different Chinese regions. The innovative kink regression method is introduced to address research gaps. The core objective is to investigate higher education's impact on per capita GDP growth in China using the ridge panel kink regression model, analyzing panel data from 31 provinces divided into four regions. The study aims to identify a kink effect, particularly the nonlinear influence of higher education on economic growth at certain thresholds. Results indicate that education variables, such as the number of students and graduates in various disciplines, exhibit a kink effect on economic growth across all regions. However, control variables like capital and labor show a linear effect. The impact of each education variable on economic growth varies before and after the kink point, with asymmetric effects observed.