Abstract This paper firstly tests the effect of increasing returns to scale by using Caldor-Verdoorn Law based on the data of China manufacturing sectors during 1980-2006. Then, it analyzes the impact of labor structure changes on labor productivity increase in terms of the demand-driven productivity increase path. Finally,we decompose the labor structure changes' contribution to the labor productivity increase. The results show as follows: The increasing returns to scale effect of productivity increase existed in China manufacturing industries during 1995-2006, and there was a trans-regional migration of surplus labor at this stage; Shift-share decomposition indicates that trans-regional labor migration contributed little to the labor productivity increase, while the internal increase in the labor productivity of these industries in all regions contributed most.
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Received: 16 April 2009
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Corresponding Authors:
XIN Yong-rong
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