Chronicle of a Decline Foretold; Has China Reached the Lewis Turning Point?
China is on the eve of a demographic shift that will have profound consequences on its economic and social landscape. Within a few years the working age population will reach a historical peak, and then begin a precipitous decline. This fact, along with anecdotes of rapidly rising migrant wages and episodic labor shortages, has raised questions about whether China is poised to cross the Lewis Turning Point, a point at which it would move from a vast supply of low-cost workers to a labor shortage economy. Crossing this threshold will have far-reaching implications for both China and the rest of the world. This paper empirically assesses when the transition to a labor shortage economy is likely to occur. Our central result is that on current trends, the Lewis Turning Point will emerge between 2020 and 2025. Alternative scenarios—with higher fertility, greater labor participation rates, financial reform or higher productivity—may peripherally delay or accelerate the onset of the turning point, but demographics will be the dominant force driving the depletion of surplus labor.
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- Zhang, Xiaobo & Yang, Jin & Wang, Shenglin, 2011.
"China has reached the Lewis turning point,"
China Economic Review,
Elsevier, vol. 22(4), pages 542-554.
- Zhang, Xiaobo & Yang, Jin & Wang, Shenglin, 2010. "China has reached the lewis turning point," IFPRI discussion papers 977, International Food Policy Research Institute (IFPRI).
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- John Knight & Deng Quheng and Li Shi, 2010. "The Puzzle of Migrant Labour Shortage and Rural Labour Surplus in China," Economics Series Working Papers 494, University of Oxford, Department of Economics.
- Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: Demographic Change and the Labour Supply Constraint," PGDA Working Papers 1106, Program on the Global Demography of Aging. Full references (including those not matched with items on IDEAS)