A multiyear lags input-holding-output model on education with excluding idle capital

This paper develops a multi-year lag Input-Holding-Output (I-H-O) Model on education with exclusion of the idle capital to address the reasonable education structure in support of a sustainable development strategy in China. First, the model considers the multiyear lag of human capital because the lag time of human capital is even longer and more important than that of fixed capital. Second, it considers the idle capital resulting from the output decline in education, for example, student decrease in primary school. The new generalized Leonitief dynamic inverse is deduced to obtain a positive solution on education when output declines as well as expands. After compiling the 2000 I-H-O table on education, the authors adopt modifications-by-step method to treat nonlinear coefficients, and calculate education scale, the requirement of human capital, and education expenditure from 2005 to 2020. It is found that structural imbalance of human capital is a serious problem for Chinese economic development.