Abstract:The returns of human capital investment in China's urban and rural areas are rather asymmetrical. In the country, this asymmetry is demonstrated as the spillover of investment returns to the city, but the city only has such spillover to the city itself, not to the country. As a result, rural development is restricted because of lack of necessary human capital investment, which causes the increasing gap between the development of urban and rural areas. The government should increase human capital investment in different forms in rural areas.