Education: The Engine of Investments in Human Capital in China´s Rural Areas

China is a populous country with rich labor resources. It will gain sustainable momentum in future competition if the human resources can be transformed into human capital, especially investments in human capital in the vast rural areas. Through investment in education, the advantages of resource can be converted into competition. This article, through economic methods, analyzes investment in education from four aspects: the analysis on cost and benefit, Matthew Effect, life-cycle theory and education signal. It is believed if investment is increased in education in rural areas, the investments in human capital will be more promising, the economic development will be coordinated, the income gap between urban and rural will be narrowed and the quality of our people will be improved.