Human capital dynamics in China: Evidence from a club convergence approach

This paper investigates the evolution of human capital in China for 31 provinces over period 1985–2016 from a club convergence perspective. Per capita stocks, estimated using Jorgenson–Fraumeni lifetime income approach, are first time examined within non-linear latent factor framework that allows to model wide range transition dynamics each province along path convergence. The study finds no overall between China, however, results strongly support existence multiple clubs. While small group converging toward highest levels capital, most other failing catch up and form separate clusters converge lower equilibria. These regional patterns provide new evidence on increasing gap Chinese provinces, posing significant challenge more inclusive harmonious economic development.