Impact of Human Capital Investment on the Human Capital Depreciation

Unreasonable human capital investment will lead to human capital depreciation.Taking higher education expansion in Shanghai as an example,the paper pointed out that unreasonable education investment will cause average education resource diluted,talent supply imbalance and resulting unemployment issues.According to establishment of vector auto-regressive(VAR) and impulse response function(IRF),the paper examined the dynamic relation between the total number of students in regional colleges and regional unemployment rate in Shanghai.The empirical results show that there exists causal relation between both.The former impacted the latter obviously and positively.It is explained that unreasonable human capital investment has a significant impact on the employment in Shanghai,and that the hypothesis has been proved empirically.