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The Growth of “Non-material Services" in China:-Maddison's “Zero-Labor-Productivity-Growth"Hypothesis Revisited-

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  • Wu, Harry X.

Abstract

This study revisits Maddison's controversial "zero-labor-productivity- growth" hypothesis on the growth of China's "non-material services". I show that by controlling for the same development stage as the Chinese economy in 1993-2012, South Korea showed zero or slightly negative growth in those services in 1970-90. I also show that physical indicators on education and healthcare industries do not show any significant labor productivity growth. To improve Maddison's earlier work, I have adjusted the 1990s structural break in employment series, converted numbers to hours worked, and reconstructed military personnel. I also allow one to two percent growth of labor productivity to reflect the correction to factor cost distortions. My new results suggest that the labor productivity growth of this sector is between 2.2 and 2.9 percent per annum in 1993-2012.

Suggested Citation

  • Wu, Harry X., 2014. "The Growth of “Non-material Services" in China:-Maddison's “Zero-Labor-Productivity-Growth"Hypothesis Revisited-," Economic Review, Hitotsubashi University, vol. 65(3), pages 265-283, July.
    • Handle: RePEc:hit:ecorev:v:65:y:2014:i:3:p:265-283
    DOI: 10.15057/27361
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    Cited by:

    1. Schröder, Michael, 2017. "Konjunkturindikatoren für China: Projektbericht für das Ministerium für Wirtschaft, Arbeit und Wohnungsbau Baden-Württemberg," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 162730.

    More about this item

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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