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Rural human capital investment’s driving effects to labor migration - An empirical study based on Vector Error Correction Model

Author

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  • Shihu Zhong
  • Tang Juan

Abstract

Based on vector error correction model, this essay aims to test the relationship between the rural human capital investment and labor migration by using the data of Hunan province from 1994 to 2014. Experiment results show the long-term balanced relationship between rural human capital investment and labor migration. Rural human capital investment can boost the transfer of labor force effectively in the long run. While none obvious effect would take in a short time. There is time lag effect on human capital investment. The time needed to amend the cointegration relationship would be long and the primary factor that affects the labor migration is the prophase investment of human capital.

Suggested Citation

  • Shihu Zhong & Tang Juan, 2016. "Rural human capital investment’s driving effects to labor migration - An empirical study based on Vector Error Correction Model," Business and Economic Horizons (BEH), Prague Development Center, vol. 12(4), pages 164-172, December.
  • Handle: RePEc:pdc:jrnbeh:v:12:y:2016:i:4:p:164-172
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    More about this item

    Keywords

    Rural human capital investment; labor migration; vector error correction model (VECM); time lag effect;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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