China has reached the lewis turning point
AbstractIn the past several years, labor shortages in China have become an issue. However, there is heated debate as to whether China has passed the Lewis turning point and moved from a period of unlimited supply to a new era of labor shortage. Most empirical studies on this topic focus on estimation of total labor supply and demand. Yet the poor quality of China’s labor statistics leaves the debate open. In this paper, China’s position along the Lewis continuum is examined though primary surveys of wage rates, which offer a more reliable statistic than employment data. Our results show a clear rising trend in real wage rates 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.
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Bibliographic InfoPaper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 977.
Date of creation: 2010
Date of revision:
dual economy; employment data; Labor market; Lewis model; Supply and demand; surplus labor; wage rates;
Other versions of this item:
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-17 (All new papers)
- NEP-DEV-2010-07-17 (Development)
- NEP-TRA-2010-07-17 (Transition Economics)
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