Optimization of Human Capital Structure and the Dynamic Evolution of China’s Comparative Advantages

Abstract

Technological progress is an important source of dynamic comparative advantages. According to the new growth theory, human capital has a profound influence on technological progress. Through persistent “learning by doing” and homegrown innovation, the human capital of a country has a positive influence on the dynamic evolution of the comparative advantages and the dynamic obtaining of comparative interests. Although existing literatures have fully recognized the important role of the overall level of human capital in technological progress and creation of dynamic comparative advantages, they have ignored an important source of dynamic comparative advantages—the optimization of human capital structure. Based on the studies of Sequeira, Vandenbussche et al., and Manca, we believe that human capital has a level effect and a structural effect on technological progress and economic growth. When the human capital structure remains unchanged, enhancing the overall level of human capital boosts technological progress and economic growth. This is the level effect of human capital. When the overall level of human capital remains constant, the optimization of the human capital structure also boosts technological progress and economic growth. This relies on the structural effect of human capital. By formulating corresponding human capital policies, we can optimize the structure of human capital and achieve technological progress and accumulation and efficient allocation of the human capital factor, so as to realize the upgrading of the foreign trade structure from resource- and labor-intensive products to capital- and technology-intensive products. Therefore, the optimization of the human capital structure is of important practical significance for China’s establishment of its dynamic comparative advantages and for realization of its comparative interests.