Abstract:The study, focusing on elaborating differentiation of various structural layers of the supply-side and taking transformation of China's economic development stage and the change of labor factor demand caused by the new scientific and technological revolution into consideration, looks into the role of different factors input in current economic growth. The results of this study shows that under the circumstance of constant weakening correlation effects between technological innovation-driven economic growth and employment increase and the current situation of resource endowment, capital, and low-quality labor force, human capital investment is the decisive factor of China’s high quality development. Therefore, an important focus of deepening supply-side structural reform should be on improving the quality of human capital supply through promoting the upgrading of labor factor structure, so as to transform economic growth model to the one driven by total factor productivity. Moreover, this study also explores the relationship between labor market system and labor factor structure upgrading, proposing policy suggestions for accelerating human capital accumulation through labor market system reform.