The Restraining Effect of Human Capital Mismatch and Structure Distortion on Economic Growth -- A New Structural Economics Analysis

Abstract

Based on the theory of new structural economics, this paper investigates the restraining effect of human capital mismatch and structural distortion on economic growth. First of all, this paper puts forward the core hypothesis through theoretical analysis, and then analyzes it by mathematical model, which shows that the human capital mismatch between monopoly departments and competitive departments will inhibit innovation efficiency, and then inhibit economic growth. The structural distortion of human capital in the two sectors will make industrial structure deviate from the comparative advantage, and then restrain economic growth. Secondly, using the provincial panel data of China from 2006 to 2019, this paper establishes the index of human capital mismatch and structural distortion to conducts empirical tests on the theoretical model. The conclusion shows that the uneven distribution of human capital among industries in China will restrain economic growth through human capital mismatch and structural distortion, while the latter has a greater impact, so structural distortion is the main reason why human capital accumulation cannot effectively promote economic growth, which is consistent with the basic theory of new structural economics.