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Investigating the humanitarian labor efficiency of China: a factor-specific model

Author

Listed:
  • Shulei Cheng

    (Southwestern University of Finance and Economics)

  • Wei Fan

    (Southwestern University of Finance and Economics)

  • Jianlin Wang

    (Dongbei University of Finance and Economics)

Abstract

This study constructs an index of humanitarian labor efficiency to measure labor utilization based on a factor-specific data envelopment analysis model. Compared with the traditional labor productivity index, humanitarian labor efficiency is a more reliable and comprehensive measure; it not only excludes the contribution of non-labor input but also considers the undesirable output, such as accidental deaths. The results show that China’s humanitarian labor efficiency is low, ranging from 0.3 to 0.7, and it should be improved further. Unlike labor productivity, humanitarian labor efficiency did not increase markedly between 2007 and 2017. Further analysis revealed that pure labor efficiency declined while pure humanitarian efficiency increased for this period, which offset each other. Tobit regression shows that industrial structure has a significant influence on humanitarian labor efficiency. Baumol’s disease, caused by the growing tertiary industry, may result in the decline of labor utilization efficiency in China. This study presents suggestions on how to deal with Baumol’s disease.

Suggested Citation

  • Shulei Cheng & Wei Fan & Jianlin Wang, 2022. "Investigating the humanitarian labor efficiency of China: a factor-specific model," Annals of Operations Research, Springer, vol. 319(1), pages 439-461, December.
    • Handle: RePEc:spr:annopr:v:319:y:2022:i:1:d:10.1007_s10479-020-03736-z
    DOI: 10.1007/s10479-020-03736-z
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