Abstract
This report analyzes human capital development and its future prospects in the People’s Republic of China (PRC) and India. It highlights the related differences and achievements in the two countries and investigates the role of human capital development in their economic growth.
The world has witnessed the remarkable economic growth of the PRC and India, two demographic giants, in the past decades. The strong and sustained output growth of the PRC in the past 35 years has driven the unprecedented transformation of a rural, command economy into a global economic superpower. Having made the transition from an upper-middle-income economy to one of high-income status, the PRC is now striving to develop more technologically sophisticated industries. Economic growth in India began to accelerate dramatically once economic reforms and open-trade policies were initiated in the early 1990s. The economic miracle witnessed in the PRC as well as India is attributed to the expansion and effective utilization of their abundant human resources, in addition to market reform and outward-oriented policies.
Contents
Foreword
Acknowledgments
Abbreviations
Executive Summary
I. Overview 1
A. Objective and Scope 1
B. Organization of the Report 2
C. Background and Motivation 3
II. Human Capital Development, Achievements, and Gaps 10
A. Literacy, School Enrollments, and Educational Attainment 10
B. Disparities in Educational Achievements and Opportunities 14
C. Quality of Education 19
D. Employability and Skills Development 28
E. Challenges to Quality Employment and Inclusive Growth 33
F. Rates of Return to Schooling and Wage Structure 39
III. Human Development and Economic Growth 46
A. Impacts of Human Development on Economic Growth: Theory and Evidence 46
B. Growth Accounting 48
C. Role of Human Capital in Technological Progress 51
D. Labor Reallocation, Structural Transformation, and Growth 54
IV. Labor Supply and Education: Prospects and Challenges 60
A. Labor Supply 60
B. Labor Force Participation 62
C. Projections of Educational Attainment by Gender and Level 68
D. Demand and Supply of Workers 69
V. Skill Upgrading and Wage Inequality: A Microdata Analysis 72
A. Data and Empirical Methodology 73
B. Results from the Analysis of Microdata from the People’s Republic of China 74
C. Results from the Analysis of Indian Microdata 85
VI. Policy Challenges and Recommendations for Human Capital Development 100
A. Reducing Disparities in Accessibility and Improving Quality of Education 100
B. Skills Development 106
C. Employment and Labor Markets 112
D. Conclusion 114
References 118