IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v21y2010i4p557-570.html
   My bibliography  Save this article

Sources of Chinese labor productivity growth: A structural decomposition analysis, 1987-2005

Author

Listed:
  • Yang, Ling
  • Lahr, Michael L.

Abstract

We decompose labor productivity growth from 1987 to 2005 by examining six partial factors (both supply and demand): changes in value-added coefficients, labor inputs, shares of sectoral demands that are fulfilled domestically, input mix, and the intra-sectoral shares and intersectoral mix of final demand. Our analysis confirms that simply by virtue of its size and extremely low level of labor productivity, China's farm sector continues to weigh heavily in China's overall economic advances. Labor savings have levied the largest influence on the labor productivity on all sectors across all three study subperiods. We find that this transition is highly correlated with capital deepening that accompanies China's opening up process. Still, changes in the intra-sectoral shares and the intersectoral mix of China's final demand also have become quite strong, especially in recent periods. Due to ever-increasing competitive pressures as China continues to open, changes in industries value-added coefficients have tended to counteract some of the positive benefits of labor savings for most sectors. The effects on changes in labor productivity of technology change and changes in the use of imports have been comparatively negligible and any variation in their sectoral effects have been waning over time.

Suggested Citation

  • Yang, Ling & Lahr, Michael L., 2010. "Sources of Chinese labor productivity growth: A structural decomposition analysis, 1987-2005," China Economic Review, Elsevier, vol. 21(4), pages 557-570, December.
  • Handle: RePEc:eee:chieco:v:21:y:2010:i:4:p:557-570
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043-951X(10)00067-2
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fagerberg, Jan, 2000. "Technological progress, structural change and productivity growth: a comparative study," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 393-411, December.
    2. Silva, Ester G. & Teixeira, Aurora A.C., 2008. "Surveying structural change: Seminal contributions and a bibliometric account," Structural Change and Economic Dynamics, Elsevier, vol. 19(4), pages 273-300, December.
    3. Peneder, Michael, 2003. "Industrial structure and aggregate growth," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 427-448, December.
    4. Dani Rodrik, 2006. "What's So Special about China's Exports?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 1-19.
    5. Peter K. Schott, 2008. "The relative sophistication of Chinese exports," Economic Policy, CEPR;CES;MSH, vol. 23, pages 5-49, January.
    6. Erik Dietzenbacher & Bart Los, 1998. "Structural Decomposition Techniques: Sense and Sensitivity," Economic Systems Research, Taylor & Francis Journals, vol. 10(4), pages 307-324.
    7. Gregory C. Chow, 1993. "Capital Formation and Economic Growth in China," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 809-842.
    8. Kui-Wai Li, 2003. "China's Capital and Productivity Measurement Using Financial Resources," Working Papers 851, Economic Growth Center, Yale University.
    9. Yang, Ling & Lahr, Michael L., 2008. "Labor Productivity Differences in China 1987-1997: An Interregional Decomposition Analysis," The Review of Regional Studies, Southern Regional Science Association, vol. 38(3), pages 319-341.
    10. Holz, Carsten A., 2006. "New capital estimates for China," China Economic Review, Elsevier, vol. 17(2), pages 142-185.
    11. Jens J. Krüger, 2008. "Productivity And Structural Change: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 330-363, April.
    12. Jefferson, Gary H. & Rawski, Thomas G. & Zheng, Yuxin, 1996. "Chinese Industrial Productivity: Trends, Measurement Issues, and Recent Developments," Journal of Comparative Economics, Elsevier, vol. 23(2), pages 146-180, October.
    13. Hu, Baiding & McAleer, Michael, 2004. "Input–output structure and growth in China," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 64(1), pages 193-202.
    14. Aying Liu & Shujie Yao & Zongyi Zhang, 1999. "Economic Growth and Structural Changes in Employment and Investments in China, 1985–94," Economic Change and Restructuring, Springer, vol. 32(3), pages 171-190, October.
    15. Dietzenbacher, Erik & Hoen, Alex R, 1998. "Deflation of Input-Output Tables from the User's Point of View: A Heuristic Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 111-122, March.
    16. Shenggen Fan & Xiaobo Zhang & Sherman Robinson, 2003. "Structural Change and Economic Growth in China," Review of Development Economics, Wiley Blackwell, vol. 7(3), pages 360-377, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhou, Xianbo & Li, Kui-Wai & Li, Qin, 2011. "An analysis on technical efficiency in post-reform China," China Economic Review, Elsevier, vol. 22(3), pages 357-372, September.
    2. Juan Tomas Sayago-Gomez, 2014. "Matlab Code for Structural Decomposition Analysis," Working Papers Technical Document 2014-0, Regional Research Institute, West Virginia University.
    3. Martin Lábaj & Karol Morvay & Martin Hudcovský, 2015. "Labour Elasticity in V4 countries: Structural decomposition analysis," Department of Economic Policy Working Paper Series 009, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
    4. Timo Mitze & Selin Özyurt, 2014. "The Spatial Dimension of Trade- and FDI-driven Productivity Growth in Chinese Provinces: A Global Cointegration Approach," Growth and Change, Wiley Blackwell, vol. 45(2), pages 263-291, June.
    5. repec:gam:jeners:v:9:y:2016:i:4:p:259:d:67071 is not listed on IDEAS
    6. Strohmaier, R. & Rainer, A., 2016. "Studying general purpose technologies in a multi-sector framework: The case of ICT in Denmark," Structural Change and Economic Dynamics, Elsevier, vol. 36(C), pages 34-49.
    7. Bowen Xiao & Dongxiao Niu & Xiaodan Guo, 2016. "The Driving Forces of Changes in CO 2 Emissions in China: A Structural Decomposition Analysis," Energies, MDPI, Open Access Journal, vol. 9(4), pages 1-17, March.
    8. repec:unu:wpaper:wp2012-83 is not listed on IDEAS
    9. Thurlow, James & Yang, Ling & Lahr, Michael L., 2012. "The (Declining) Role of Households in Sustaining China's Economy: Structural Path Analysis for 1997-2007," WIDER Working Paper Series 083, World Institute for Development Economic Research (UNU-WIDER).
    10. repec:zbw:rwirep:0308 is not listed on IDEAS
    11. Selin Özyurt & Timo Mitze, 2012. "The Spatial Dimension of Trade- and FDI-driven Productivity Growth in Chinese Provinces – A Global Cointegration Approach," Ruhr Economic Papers 0308, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Strohmaier, Rita & Rainer, Andreas, 2013. "On the Eonomic Purpose of General Purpose Technologies: A Combined Classical and Evolutionary Framework," MPRA Paper 45964, University Library of Munich, Germany.
    13. Rohman, Ibrahim Kholilul & Bohlin, Erik, 2014. "Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on?," Telecommunications Policy, Elsevier, vol. 38(3), pages 248-263.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:21:y:2010:i:4:p:557-570. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/chieco .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.