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Has China run out of surplus labour?

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  • Golley, Jane
  • Meng, Xin

Abstract

Many recent studies claim that China has reached a Lewisian ‘turning point’ in economic development, signalled by rising wages in urban areas and the exhaustion of rural surplus labour. In this paper we show that despite some evidence of rising nominal urban unskilled wages between 2000 and 2009, there is little in the data to suggest that this wage increase has been caused by unskilled labour shortages. China still has abundant under-employed workers with very low income in the rural sector. We argue that China's unique institutional and policy-induced barriers to migration have both prevented many rural workers from migrating to cities and also reduced the migrants' length of stay. We project that under alternative institutional settings, the migrant stock could easily be doubled from the current 150million to 300million by increasing either the average length of migrant stay, or the migrant inflow, or both.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 22 (2011)
Issue (Month): 4 ()
Pages: 555-572

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Handle: RePEc:eee:chieco:v:22:y:2011:i:4:p:555-572

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

Related research

Keywords: Chinese labour markets; Surplus labour; Rural-urban migration;

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Cited by:
  1. Rod Tyers, 2014. "Analysing the Short Run Effects of China’s Economic Reform Agenda," CAMA Working Papers 2014-29, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  2. Rod Tyers, 2012. "The Rise and Robustness of Economic Freedom in China," Economics Discussion / Working Papers 12-02, The University of Western Australia, Department of Economics.
  3. 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, vol. 25(C), pages 1-32.
  4. Bonatti, Luigi & Fracasso, Andrea, 2013. "Hoarding of international reserves in China: Mercantilism, domestic consumption and US monetary policy," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 1044-1078.
  5. Rod TYERS, 2013. "China and Global Macroeconomic Interdependence," CAMA Working Papers 2013-34, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  6. Jose Miguel Albala-Bertrand, 2013. "Evolution of Structural Indicators. China and Regions: 1981-2010," Working Papers 701, Queen Mary, University of London, School of Economics and Finance.
  7. Jane Golley & Rod Tyers, 2012. "China's Gender Imbalance and its Economic Performance," Economics Discussion / Working Papers 12-10, The University of Western Australia, Department of Economics.
  8. Brendan Coates & Nghi Luu, 2012. "China's emergence in global commodity markets," Economic Roundup, Treasury, Australian Government, issue 1, pages 1-30, May.
  9. Rod Tyers, 2012. "Looking Inward for Transformative Growth in China," CAMA Working Papers 2012-15, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  10. Rod Tyers, 2013. "International Effects of China's Rise and Transition: Neoclassical and Keynesian Perspectives," CAMA Working Papers 2013-44, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  11. Anthony Rush, 2011. "China's Labour Market," RBA Bulletin, Reserve Bank of Australia, pages 29-38, September.
  12. Bonatti, Luigi & Fracasso, Andrea, 2014. "Modeling the Transition Towards Renminbi's Full Convertibility: Implications for China’s Growth," MPRA Paper 54129, University Library of Munich, Germany.
  13. Rod Tyers, 2012. "Looking Inward for Growth," Economics Discussion / Working Papers 12-04, The University of Western Australia, Department of Economics.
  14. Brendan Coates & Dougal Horton & Lachlan McNamee, 2012. "China: prospects for export-driven growth," Economic Roundup, Treasury, Australian Government, issue 4, pages 79-102, December.
  15. Vipin Arora & Rod Tyers & Ying Zhang, 2014. "Reconstructing the Savings Glut: The Global Implications of Asian Excess Saving," CAMA Working Papers 2014-20, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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