Human Capital, Education, and Entrepreneurs: Evidence from the Yangtze River Delta

Abstract

This paper seeks to examine the relationship between education demand and entrepreneurs in the process of enhancing the growth of human capital in China. We develop a theoretical model that incorporates the important roles played by human capital, education and entrepreneurs. Then, we derive an immigration condition under which the demand for education depends on the existence of entrepreneurs. Finally, we test whether this condition holds true in China, using a panel data set from the Yangtze River Delta which is considered a key barometer of Chinese economy. The empirical results reveal a significant positive relationship between entrepreneurs and education demand in the Yangtze River Delta, suggesting that if we can find ways to promote the growth of entrepreneurial endeavors, we could spur the growth of education demand and further drive human capital accumulation in China