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China has reached the Lewis turning point

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  • Zhang, Xiaobo
  • Yang, Jin
  • Wang, Shenglin

Abstract

In the past several years, labor shortage in China has become an emerging issue. However, there is heated debate on whether China has passed the Lewis turning point and entered a new era of labor shortage from a period of unlimited labor supply. Most empirical studies on this topic focus on the estimation of total labor supply and demand. Yet the poor quality of labor statistics leaves the debate open. In this paper, China's position along the Lewis continuum is examined though primary surveys of wage rates, a more reliable statistic than employment data. Our results show a clear rising trend of real wages rate since 2003. The acceleration of real wages even in slack seasons indicates that the era of surplus labor is over. This finding has important policy implications for China's future development model.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 22 (2011)
Issue (Month): 4 ()
Pages: 542-554

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Handle: RePEc:eee:chieco:v:22:y:2011:i:4:p:542-554

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Web page: http://www.elsevier.com/locate/chieco

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Keywords: Dual economy; Surplus labor; Lewis model; Labor market;

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References

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  1. Knight, John, 2007. "China, South Africa, and the Lewis Model," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Kaushik Basu, 2003. "Analytical Development Economics: The Less Developed Economy Revisited," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262523442, December.
  3. Fan, Shenggen & Kanbur, Ravi & Zhang, Xiaobo, 2010. "China’s Regional Disparities: Experience and Policy," Working Papers, Cornell University, Department of Applied Economics and Management 57041, Cornell University, Department of Applied Economics and Management.
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Cited by:
  1. Nathalie Chusseau & Joël Hellier, 2012. "Inequality in Emerging Countries," Working Papers hal-00993411, HAL.
  2. Jianqing, Ruan & Zhang, Xiaobo, 2010. "Do geese migrate domestically?: Evidence from the Chinese textile and apparel industry," IFPRI discussion papers 1040, International Food Policy Research Institute (IFPRI).
  3. Fan, Shenggen & Kanbur, Ravi & Wei, Shang-Jin & Zhang, Xiaobo, 2014. "The Economics of China: Successes and Challenges," Working Papers, Cornell University, Department of Applied Economics and Management 180153, Cornell University, Department of Applied Economics and Management.
  4. Christiaensen, Luc & Heltberg, Rasmus, 2014. "Greening China's rural energy: new insights on the potential of smallholder biogas," Environment and Development Economics, Cambridge University Press, vol. 19(01), pages 8-29, February.
  5. Qin, Yu & Zhang, Xiaobo, 2012. "Road to Specialization in Agricultural Production: Evidence from Rural China," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil, International Association of Agricultural Economists 126455, International Association of Agricultural Economists.
  6. Mayer, Jörg, 2012. "Global rebalancing: Effects on trade and employment," Journal of Asian Economics, Elsevier, vol. 23(6), pages 627-642.
  7. Deininger, Klaus & Jin, Songqing & Xia, Fang, 2012. "Moving off the farm: Land institutions to facilitate structural transformation and agricultural productivity growth in China," Policy Research Working Paper Series 5949, The World Bank.
  8. Qin, Yu & Zhang, Xiaobo, 2012. "The road to specialization in agricultural production:: Evidence from rural China," IFPRI discussion papers 1221, International Food Policy Research Institute (IFPRI).
  9. Binkai Chen & Ming Lu & Ninghua Zhong, 2012. "Hukou and Consumption Heterogeneity: Migrants' Expenditure Is Depressed by Institutional Constraints in Urban China," Global COE Hi-Stat Discussion Paper Series, Institute of Economic Research, Hitotsubashi University gd11-221, Institute of Economic Research, Hitotsubashi University.
  10. Muto, Ichiro & Fukumoto, Tomoyuki, 2011. "Rebalancing China’s economic growth: some insights from Japan’s experience," MPRA Paper 32570, University Library of Munich, Germany.
  11. Kym Anderson & Anna Strutt, 2014. "Food security policy options for China: lessons from other countries," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2014-11, The Australian National University, Arndt-Corden Department of Economics.
  12. Loyalka, Prashant & Liu, Chengfang & Song, Yingquan & Yi, Hongmei & Huang, Xiaoting & Wei, Jianguo & Zhang, Linxiu & Shi, Yaojiang & Chu, James & Rozelle, Scott, 2013. "Can information and counseling help students from poor rural areas go to high school? Evidence from China," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1012-1025.
  13. Fan, Shenggen & Brzeska, Joanna & Keyzer, Michiel & Halsema, Alex, 2013. "From subsistence to profit: Transforming smallholder farms," Food policy reports, International Food Policy Research Institute (IFPRI) 26, International Food Policy Research Institute (IFPRI).
  14. Kanbur, Ravi, 2012. "Does Kuznets Still Matter?," Working Papers, Cornell University, Department of Applied Economics and Management 128794, Cornell University, Department of Applied Economics and Management.
  15. Bonatti, Luigi & Fracasso, Andrea, 2013. "Regime switches in the Sino-American co-dependency: Growth and structural change in China," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 25(C), pages 1-32.
  16. Anderson, Kym & Strutt, Anna, 2014. "Impacts of Asia’s Rise on African and Latin American Trade: Projections to 2030," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia, Australian Agricultural and Resource Economics Society 165805, Australian Agricultural and Resource Economics Society.
  17. Andersson, Fredrik N. G. & Edgerton, David & Opper, Sonja, 2011. "A Matter of Time: Revisiting Growth Convergence in China," Working Papers, Lund University, Department of Economics 2011:23, Lund University, Department of Economics, revised 01 Mar 2012.
  18. Roberto Fanfani & Nica Claudia Calò, 2011. "Rural Areas and Agricultural Holdings in China: What Has Changed Within Ten Years from the 1996 to the 2006?," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, December.

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