Calculation and Measurement of China’s Human Capital after Comparing Human Capital with Technological Innovation

Abstract

Human capital, as a synthesis of wisdom and physical fitness condensed in workers, is sometimes confused with technological innovation by existing literature. This paper makes comparisons between these two terminologies. Technological innovation is a short-term activity that attaches importance to economic benefits while human capital accumulation is a long-term strategic process with lifelong benefits, and human capital is the foundation of technological innovation. In empirical part, this paper adopts Solow Residual Method to calculate stock, elasticity and growth rate of human capital of 10 countries after eliminating physical capital, labor force and technological innovation. It is found that human capital stock in the United States is the largest and human capital growth in China is the fastest. Calculation is followed by measurement. We construct a comprehensive index of human capital by using Index Weight Assignment Method and Two-level & Three-factor CES Function to measure and predict human capital level in China. Both calculating and measuring results show that growth rate of China’s human capital is around 5%. In the future, for highquality economic development, China should give priority to human capital development and comprehensively improve human capital competitiveness.