Abstract: Educational expansion has long-term significance for promoting economic development. Previous studies often ignore the externality of educational expansion and its crowding-out effect on labor participation rate. This paper incorporates these two factors into the growth model. Theoreticaland empirical analysis show that:(1) Educational expansion promotes the growth of output of per worker through the improvement of human capital level and technology spillovers . (2) Educational expansion reduces the labor participation rate,causing it to have an inverted U-shaped relationship with the per capita income of the total population. However,the current level of educational expansion in China is far from the turning point,and educational expansion will continue to promote the growth of the per capita income of the total population. (3) The greater the macro-education rate of return,the lower the population growth rate,and the higher the retirement age,the greater the effect of educational expansion on the per capita income of the total population. In view of this,in the context of the gradual decline in the fertility rate and the gradual increase in the probability of delayed retirement in China,the education expansion policy should be continued.

Key words: educational expansion, labor participation rate, externality, economic growth, Macro-Mincer Equation