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A Study on the Contribution Rate of Investment in Education in China to the Economic Growth

The contribution of education to economic growth is mainly achieved indirectly through two aspects: improving the quality of workers and increasing labor productivity. The improving of workers' level of education is the source to make the quality of their labor better. Based on Cobb-Douglas production function, the article constructs an improved production function by adding the education factor, through which it calculates that contribution rate of investment in education and higher education in China to the economic growth were 12.855 percent and 2.410 percent separately from 1996 to 2008.According to the results of the calculation, the article concludes that the pulling effect of investment in education and higher education in China on economic growth has markedly increased but still far below that in developed countries, and analyzes the main reasons for the conclusion which are the college enrollment policy and inadequate investment in education.