IDEAS home Printed from https://ideas.repec.org/a/wsi/ceprxx/v02y2013i02ns1793969013500052.html
   My bibliography  Save this article

Development and Sources of Labor Productivity in Chinese Provinces

Author

Listed:
  • Almas Heshmati

    (Department of Economics, Sogang University, Room K526, 35 Baekbeom-ro (Sinsu-dong #1), Mapo-gu, Seoul 121-742, Korea)

  • Biwei Su

    (Department of Food and Resource Economics, Korea University, Seoul, Korea)

Abstract

As China exhibited unprecedented rapid economic growth ever since its reform and opening, the development and sources of labor productivity has gradually come to the forefront. This paper studies the development and the source of labor productivity in 31 Chinese provinces during 2000–2009. The labor productivity is investigated through an examination at both the levels and the growth rate. Particularly, we first look at the production function relationship, to see the contribution of labor and other production factors to the gross domestic product. Then, a number of possible determinants are defined. They are regressed on the level and the growth rate of labor productivity to shed light on their relationships. Controlled for unobserved time-specific and province-specific effects, the fixed effects model with heteroskedasticity robust adjustments have been used for the estimation of three functions. Regional breakdown shows severe disparity in the economy where three municipal cities have the highest labor productivity among other regions. Subsequently, we summarize the different sources and their contributions to labor productivity and provide several policy suggestions.

Suggested Citation

  • Almas Heshmati & Biwei Su, 2013. "Development and Sources of Labor Productivity in Chinese Provinces," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-30.
    • Handle: RePEc:wsi:ceprxx:v:02:y:2013:i:02:n:s1793969013500052
    DOI: 10.1142/S1793969013500052
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S1793969013500052
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S1793969013500052?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fleisher, Belton M. & Wang, Xiaojun, 2005. "Returns to schooling in China under planning and reform," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 265-277, June.
    2. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 323-350, National Bureau of Economic Research, Inc.
    3. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    4. Au, Chun-Chung & Henderson, J. Vernon, 2006. "How migration restrictions limit agglomeration and productivity in China," Journal of Development Economics, Elsevier, vol. 80(2), pages 350-388, August.
    5. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    6. Yan Wang & Yudong Yao, 2001. "Sources of China's economic growth, 1952-99 : incorporating human capital accumulation," Policy Research Working Paper Series 2650, The World Bank.
    7. Zuliu F. Hu & Mohsin S. Khan, 1997. "Why Is China Growing So Fast?," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 103-131, March.
    8. repec:rre:publsh:v:38:y:2008:i:3:p:319-41 is not listed on IDEAS
    9. Gary S. Becker, 1994. "Human Capital Revisited," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 15-28, National Bureau of Economic Research, Inc.
    10. Cai, Fang & Wang, Dewen & Du, Yang, 2002. "Regional disparity and economic growth in China: The impact of labor market distortions," China Economic Review, Elsevier, vol. 13(2-3), pages 197-212.
    11. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    12. Gary S. Becker, 1994. "Investment in Human Capital: Effects on Earnings," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 29-58, National Bureau of Economic Research, Inc.
    13. Chen, Baizhu & Feng, Yi, 2000. "Determinants of economic growth in China: Private enterprise, education, and openness," China Economic Review, Elsevier, vol. 11(1), pages 1-15.
    14. Gary S. Becker, 1994. "Investment in Human Capital: Rates of Return," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 59-160, National Bureau of Economic Research, Inc.
    15. Becker, Gary S., 1994. "Human Capital," University of Chicago Press Economics Books, University of Chicago Press, edition 3, number 9780226041209, September.
    16. CHEN, Guifu & HAMORI, Shigeyuki, 2009. "Economic returns to schooling in urban China: OLS and the instrumental variables approach," China Economic Review, Elsevier, vol. 20(2), pages 143-152, June.
    17. Gary S. Becker, 1994. "Age, Earnings, Wealth, and Human Capital," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 228-244, National Bureau of Economic Research, Inc.
    18. Heckman, James & Li, Xuesong, 2003. "Selection bias, comparative advantage and heterogeneous returns to education: Evidence from China in 2000," Working Paper Series 2003:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    19. Shiu, Alice & Heshmati, Almas, 2006. "Technical Change and Total Factor Productivity Growth for Chinese Provinces: A Panel Data Analysis," Ratio Working Papers 98, The Ratio Institute.
    20. Yanrui Wu, 2008. "Productivity, Efficiency and Economic Growth in China," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-22825-2.
    21. Meng, Qingxuan & Li, Mingzhi, 2002. "New Economy and ICT development in China," Information Economics and Policy, Elsevier, vol. 14(2), pages 275-295, June.
    22. Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-698, June.
    23. Wang, Yan & Yao, Yudong, 2003. "Sources of China's economic growth 1952-1999: incorporating human capital accumulation," China Economic Review, Elsevier, vol. 14(1), pages 32-52.
    24. Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
    25. Baltagi, Badi H. & Griffin, James M., 1983. "Gasoline demand in the OECD : An application of pooling and testing procedures," European Economic Review, Elsevier, vol. 22(2), pages 117-137, July.
    26. Tamura, Robert, 1994. "Fertility, Human Capital and the Wealth of Families," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(4), pages 593-603, May.
    27. Romer, Paul M., 1990. "Human capital and growth: Theory and evidence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 32(1), pages 251-286, January.
    28. Gordon, Roger H. & Li, David D., 1999. "The effects of wage distortions on the transition:: Theory and evidence from China," European Economic Review, Elsevier, vol. 43(1), pages 163-183, January.
    29. Heshmati, Almas & Yang, Wanshan, 2006. "Contribution of ICT to the Chinese Economic Growth," Ratio Working Papers 91, The Ratio Institute.
    30. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    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. Arash Ketabforoush Badri & Afshin Ketabforoush Badri & Aidin Poorabdollahi Sheshgelani & Fatemeh Ghahremani, 2016. "Analyze the Impacts of Human Development on the Industrial Value Added," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 1(1), pages 6-11, December.
    2. Suna Korkmaz & Oya Korkmaz, 2017. "The Relationship between Labor Productivity and Economic Growth in OECD Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(5), pages 71-76, May.
    3. Jagannath Mallick, 2015. "Globalisation, Structural Change and Labour Productivity Growth in BRICS Economy," FIW Working Paper series 141, FIW.
    4. Rangel González Erick & López Ornelas Luis Fernando, 2021. "Foreign Direct Investment and Labor Productivity in Regional Manufacturing Industry," Working Papers 2021-12, Banco de México.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Susan Dynarski, 2008. "Building the Stock of College-Educated Labor," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 576-610.
    2. Nuarpear Lekfuangfu, 2016. "Mortality Risk and Human Capital Investment: The Legacy of Landmines in Cambodia," PIER Discussion Papers 35., Puey Ungphakorn Institute for Economic Research, revised Jul 2016.
    3. Mtika, Mike Mathambo, 2007. "Political economy, labor migration, and the AIDS epidemic in rural Malawi," Social Science & Medicine, Elsevier, vol. 64(12), pages 2454-2463, June.
    4. Rui HAO & Zheng WEI, 2009. "Sources Of Income Differences Across Chinese Provinces During The Reform Period: A Development Accounting Exercise," The Developing Economies, Institute of Developing Economies, vol. 47(1), pages 1-29, March.
    5. Thomas Gries & Margarete Redlin, 2008. "International Integration and Regional Development in China," WIDER Working Paper Series RP2008-66, World Institute for Development Economic Research (UNU-WIDER).
    6. Sai Ding & John Knight, 2011. "Why has China Grown So Fast? The Role of Physical and Human Capital Formation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(2), pages 141-174, April.
    7. John Knight & Sai Ding, 2008. "Why has China Grown so Fast? The Role of Structural Change," Economics Series Working Papers 415, University of Oxford, Department of Economics.
    8. Fleisher, Belton & Li, Haizheng & Zhao, Min Qiang, 2010. "Human capital, economic growth, and regional inequality in China," Journal of Development Economics, Elsevier, vol. 92(2), pages 215-231, July.
    9. Almas Heshmati & Subal C. Kumbhakar, 2010. "Technical Change and Total Factor Productivity Growth: The Case of Chinese Provinces," TEMEP Discussion Papers 201054, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Feb 2010.
    10. Rui Hao, 2011. "Sources of income differences across Chinese provinces during the reform period: a development accounting exercise," CERDI Working papers halshs-00557001, HAL.
    11. T. Gries & M. Redlin, 2011. "International integration and the determinants of regional development in China," Economic Change and Restructuring, Springer, vol. 44(1), pages 149-177, April.
    12. María Gil Izquierdo & Laura de Pablos Escobar & María Martínez Torres, 2010. "Los determinantes socioeconómicos de la demanda de Educación Superior en España y la movilidad educativa intergeneracional," Hacienda Pública Española / Review of Public Economics, IEF, vol. 193(2), pages 75-108, June.
    13. Li, Tingting & Wang, Yong, 2018. "Growth channels of human capital: A Chinese panel data study," China Economic Review, Elsevier, vol. 51(C), pages 309-322.
    14. Wößmann, Ludger, 2000. "Specifying Human Capital: A Review, Some Extensions, and Development Effects," Kiel Working Papers 1007, Kiel Institute for the World Economy (IfW Kiel).
    15. Hendricks, Lutz, 1999. "Taxation and long-run growth1," Journal of Monetary Economics, Elsevier, vol. 43(2), pages 411-434, April.
    16. Xiaolei Qian & Russell Smyth, 2006. "Growth Accounting for the Chinese Provinces 1990-2000: Incorporating Human Capital Accumulation," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(1), pages 21-37.
    17. Shiu, Alice & Heshmati, Almas, 2006. "Technical Change and Total Factor Productivity Growth for Chinese Provinces: A Panel Data Analysis," Ratio Working Papers 98, The Ratio Institute.
    18. Lenkei, Balint & Mustafa, Ghulam & Vecchi, Michela, 2018. "Growth in emerging economies: Is there a role for education?," Economic Modelling, Elsevier, vol. 73(C), pages 240-253.
    19. de la Fuente, Angel, 1997. "The empirics of growth and convergence: A selective review," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 23-73, January.
    20. Howitt, Peter & Mayer-Foulkes, David, 2005. "R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(1), pages 147-177, February.

    More about this item

    Keywords

    Development; labor productivity; labor productivity growth; provinces; China;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    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:wsi:ceprxx:v:02:y:2013:i:02:n:s1793969013500052. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/cepr/cepr.shtml .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.