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Will Science and Technology Solve China's Unemployment Problem?

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  • Fredrik Sjöholm

    (Research Institute of Industrial Economics and Örebro University, P.O. Box 55665, SE-102 15 Stockholm, Sweden.)

  • Nannan Lundin

    (E3G and Stockholm Environment Institute, SE-106 91 Stockholm, Sweden.)

Abstract

China needs a substantial growth of modern-sector employment to absorb its huge supply of underemployed people and new labor market entrants. The present crisis with its massive layoffs of workers makes the issue even more pressing. Although the government has announced large public investments to deal with the business cycle downturn, less attention has been paid to the structural aspects of Chinese underemployment. One exception is the recent emphasis of technology development. However, science and technology (S&T) can have both positive and negative effects on employment. Using information from a large sample of manufacturing firms in China between 1996 and 2004, we analyze how S&T affects employment. Our results suggest that S&T does not promote employment growth. (c) 2010 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

Suggested Citation

  • Fredrik Sjöholm & Nannan Lundin, 2010. "Will Science and Technology Solve China's Unemployment Problem?," Asian Economic Papers, MIT Press, vol. 9(2), pages 1-28, Summer.
  • Handle: RePEc:tpr:asiaec:v:9:y:2010:i:2:p:1-28
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