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The Puzzle of Migrant Labour Shortage and Rural Labour Surplus in China

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  • John Knight
  • Deng Quheng and Li Shi

Abstract

The paper examines the contentious issue of the extent of surplus labour that remains in China.� China was an extreme example of a surplus labour economy, but the rapid economic growth during the period of economic reform requires a reassessment of whether the second stage of the Lewis model has been reached or is imminent.� The literature is inconclusive.� On the one hand, there are reports of migrant labour scarcity and rising migrant wages; on the other hand, estimates suggest that a considerable pool of relatively unskilled labour is still available in the rural sector.� Yet the answer has far-reaching developmental and distributional implications.� After reviewing the literature, the paper uses the 2002 and 2007 national household surveys of the Chinese Academy of Social Sciences to analyse and explain migrant wage behaviour, to predict the determinants of migration, and to examine the size and nature of the pool of potential rural-urban migrants.� An attempt is also made to project the rural and urban labour force and migration forward to 2020, on the basis of the 2005 one per cent Population Survey.� The paper concludes that for institutional reasons both phenomena are likely to coexist at present and for some time in the future.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 494.

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Date of creation: 01 Jul 2010
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Handle: RePEc:oxf:wpaper:494

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Keywords: China; Demographic transition; Labour market; Lewis turning point; Migrant wages; Migrant workers; Surplus labour;

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References

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  1. Loren Brandt & Carsten Holz, 2005. "Spatial Price Differences in China: Estimates and Implications," Microeconomics 0512001, EconWPA.
  2. Knight, John & Gunatilaka, Ramani, 2010. "Great Expectations? The Subjective Well-being of Rural-Urban Migrants in China," World Development, Elsevier, vol. 38(1), pages 113-124, January.
  3. Guifu Chen & Shigeyuki Hamori, 2009. "Solution to the Dilemma of the Migrant Labor Shortage and the Rural Labor Surplus in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(4), pages 53-71.
  4. John Knight & Linda Yueh, 2009. "Segmentation or competition in China's urban labour market?," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 79-94, January.
  5. Knight, John & Song, Lina, 1995. "Towards a Labour Market in China," Oxford Review of Economic Policy, Oxford University Press, vol. 11(4), pages 97-117, Winter.
  6. Knight, John & Song, Lina, 1999. "The Rural-Urban Divide: Economic Disparities and Interactions in China," OUP Catalogue, Oxford University Press, number 9780198293309.
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Citations

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Cited by:
  1. 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.
  2. Jiang, Shiqing & Lu, Ming & Sato, Hiroshi, 2012. "Identity, Inequality, and Happiness: Evidence from Urban China," World Development, Elsevier, vol. 40(6), pages 1190-1200.
  3. Dong He & Wenlang Zhang & Gaofeng Han & Tommy Wu, 2012. "Productivity Growth of the Non-Tradable Sectors in China," Working Papers 082012, Hong Kong Institute for Monetary Research.
  4. Andersson, Fredrik N.G. & Edgerton, David L. & Opper, Sonja, 2013. "A Matter of Time: Revisiting Growth Convergence in China," World Development, Elsevier, vol. 45(C), pages 239-251.
  5. Tomoyuki Fukumoto & Ichiro Muto, 2012. "Rebalancing China's Economic Growth: Some Insights from Japan's Experience," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(1), pages 62-82, 01.
  6. John Knight, 2012. "The Economic Causes and Consequences of Social Instability in China," Economics Series Working Papers 619, University of Oxford, Department of Economics.
  7. repec:hal:wpaper:halshs-00744438 is not listed on IDEAS
  8. Yao, Yang, 2014. "The Chinese Growth Miracle," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 7, pages 943-1031 Elsevier.
  9. Yu, Qiangyi & Wu, Wenbin & Verburg, Peter H. & van Vliet, Jasper & Yang, Peng & Zhou, Qingbo & Tang, Huajun, 2013. "A survey-based exploration of land-system dynamics in an agricultural region of Northeast China," Agricultural Systems, Elsevier, vol. 121(C), pages 106-116.
  10. Sylvie Démurger & Shi Li, 2012. "Migration, Remittances and Rural Employment Patterns: Evidence from China," Post-Print halshs-00744438, HAL.
  11. Mitali Das & Papa M N'Diaye, 2013. "Chronicle of a Decline Foretold: Has China Reached the Lewis Turning Point?," IMF Working Papers 13/26, International Monetary Fund.
  12. Luigi Bonatti & Andrea Fracasso, 2012. "The costs of rebalancing the China-US co-dependency," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 120(1), pages 59-106.
  13. 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.
  14. Mayer, Jörg, 2012. "Global rebalancing: Effects on trade and employment," Journal of Asian Economics, Elsevier, vol. 23(6), pages 627-642.
  15. Jia, Xiangping & Xiang, Cheng & Huang, Jikun, 2013. "Microfinance, self-employment, and entrepreneurs in less developed areas of rural China," China Economic Review, Elsevier, vol. 27(C), pages 94-103.
  16. 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.

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