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China¡¯s Growth Slowdown: Labor Supply, Productivity, or What?

Author

Listed:
  • Anping Chen

    (School of Economics, Jinan University, Guangzhou 510632, China)

  • Nicolaas Groenewold

    (Economics Programme, UWA Business School, University of Western Australia, Perth, WA 6009, Australia)

Abstract

There has been much discussion of the sources of China¡¯s growth slowdown but little formal econometric analysis of this question. Chen and Groenewold (2019) show that the slowdown was primarily supply-driven, but they stopped short of identifying specific supply variables. This paper extends their analysis and distinguishes several potential supply components: labor supply, productivity, and capital accumulation. Our results confirm their main conclusion that supply dominates the explanation of the slowdown. A model with two supply factors (labor supply and productivity) reveals that both components contribute to the slowdown, although productivity makes the greater contribution. However, when capital stock is added to the model, the decline in the capital accumulation rate becomes an important factor in the growth slowdown, to some extent replacing the effects of both labor supply and productivity.

Suggested Citation

  • Anping Chen & Nicolaas Groenewold, 2021. "China¡¯s Growth Slowdown: Labor Supply, Productivity, or What?," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 16(1), pages 35-66, March.
    • Handle: RePEc:fec:journl:v:16:y:2021:i:1:p:35-66
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-013-021-0003-4
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    Cited by:

    1. Shengqin Wu & Degang Yang & Fuqiang Xia & Xinhuan Zhang & Jinwei Huo & Tianyi Cai & Jing Sun, 2022. "The Effect of Labor Reallocation and Economic Growth in China," Sustainability, MDPI, vol. 14(7), pages 1-22, April.

    More about this item

    Keywords

    growth; slowdown; supply factors; labor supply; productivity; capital accumulation;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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