The Employment Effects Of Shanghai Industrial Labor Productivity Growth During Economic Transition Period

For a very long time, labor productivity and employment have been major issues for theoretical and industrial research, and aroused the attention of many national governments. Labor productivity not only determines a company's or an industry's competitive advantage, but also plays an indispensable role in increasing national wealth, workers'wages and improving people's living standards, and even in promoting social progress. However, employment is much more concerned with a state's development and people's livelihood; Sustainable economic growth, people's live and work in peace and contentment, social harmony and stability are all very close with it.After the reform and opening up for three decades, China's economy has made remarkable achievements, and has also encountered a series of unavoidable problems. In another millennium, China's economy is facing unprecedented opportunities and challenges. As the vanguard of China's economic development, Shanghai is first perceived the pressure from the international society, and is facing a major economic restructuring once again, namely, marching towards a more advanced economic pattern.As the pioneer of China's industrial development, Shanghai has been playing a leading role for all-China industrial development. Therefore, at the important period of economic transition, they have a very important theoretical and practical significances for the successful transition of Shanghai's economy, labor productivity growth and employment stability how to grasp the rhythm and pace of industrial development and how to adjust the internal structure of its industry,Thus, taking labor productivity as a logical starting point, the paper adopts many econometric methods and means to probe into the influences of industrial labor productivity growth over employment. Its contents and conclusions are as follows:(1) The decomposition model construction and empirical research of Shanghai's industrial labor productivity. First, basing on index decomposition theory, the labor productivity is decomposed into pure productivity, Baumol and Denison effect; Second, by using frontier production theory and TFP theory, the frontier production model and frontier production surface are outlined, and utilizing the distance function, quadruplicate decomposition model of Shanghai's industrial labor productivity is constructed. The three effects of Shanghai's industrial labor productivity growth factors show that pure productivity effect is the major factor of Shanghai's industrial labor productivity growth, Baumol and the Denison effects have less contribution. Thus, they are important measures for a further development of Shanghai's industry to promote the flow of elements among all industrial sectors, and to exert the overall effect of industrial sectors.Among the four factors influencing Shanghai's industrial labor productivity growth, capital deepening is the most significant, the scale efficiency of per capita capital weakest. This reflects the industries of Shanghai are still largely an external development. Thus, there are some ways in achieving the sustainable growth of Shanghai's industrial labor productivity to strengthen education and training, to improve workers' quality, to enhance the impacts of scale efficiency of per capita capital over labor productivity growth.(2) The theoretical and econometric analysis on Shanghai's labor productivity and employment during economic transition. There are some significant stage characteristics for Shanghai's labor productivity and employment growth, which coincides with Shanghai's economic development stages basically. With the characteristics that Shanghai's labor productivity and employment are slowing down, it denotes that Shanghai is facing with another economic restructuring once more, namely, the economy is turning to a more advanced pattern. An emphasis study on Shanghai's industry has also showed that they are inevitable results of the industrialization process with a slow growth of labor productivity and continuous reduce of employment; which is entirely consistent with the basic law of economic development.Taking use of econometric models and methods as relative labor productivity, structure deviation degree, etc., the paper reveals the inner causes of employment changes during economic transition.The changes of labor productivity and employment growth in thirty years show that the relationship between labor productivity and employment is not just simple as "alternative" or "compensation". The improvement of labor productivity has a crowding-out effect on employment in a short term, but it is the basis for creating jobs in a long run. Therefore, they are main channels for improving productivity, promoting economic growth and expanding employment to develop secondary and tertiary industries. The structural analysis of three industries also shows that, employment structure of Shanghai will be more reasonable with the adjustment of industrial structure.(3) An empirical study on Shanghai's industrial labor productivity growth and employment growth during the economic transition. By means of a variety of econometric methods, the paper has analyzed the relationship between three effects and-employment growth, as well as the relationship between quadruplicate decomposition factors and employment growth respectively. The results show that the improvement of industrial labor productivity has a crowding-out effect on employment. Among the three effects, pure productivity effect and Denison effect have a relatively obvious crowding-out effect on employment, and productivity and Denison is more obvious, Baumol effect the least. Among quadruplicate decomposition factors, capital deepening has the most significant crowding-out effect on employment, technological progress and the scale efficiency of per capita capital a certain crowding-out effect on employment, and technical efficiency has a certain role in promoting employment. Therefore, through the restructuring of Shanghai's industries to further enhance the Baumol effect and technical efficiency, productivity and employment can achieve a synchronous growth.(4) A micro-case analysis on Shanghai's industrial labor productivity and employment growth. Through the means to acquire business information as questionnaires, interviews, etc. and to follow the idea of decomposition for macro-level data, the paper has analyzed the main factors affecting labor productivity at the enterprise level. Meanwhile, by using econometric methods, the paper has probed into the impacts of labor productivity over employment.The research results show that the improvement of labor productivity in industrial enterprises will have a crowding-out effect on employment, which has proved the macro-level research findings at the enterprise level. Dual decomposition factors has also showed some enterprises belong to external development ones, some other enterprises connotative ones. The research on both labor productivity and employment of some enterprises also shows that labor productivity and employment can achieve a synchronous growth through internal restructuring for those companies with promising development.(5) Some policy recommendations for promoting Shanghai's industrial labor productivity and employment growth during economic transition. Basing on previous theoretical and empirical research, the paper has pointed out some problems and shortcomings existed in Shanghai's industrial labor productivity and employment growth during economic transition through an analysis, summary and conclusion, and put forward some practical policy recommendations accordingly.The innovation of this paper is mainly as follows:(1) The Innovation of research perspective. Basing on the stochastic frontier production theory, the paper has taken Shanghai's industrial labor productivity and employment growth into a unified research framework, building a theoretical framework for them, and probing into their evolutionary mechanisms. Previous studies discussed Shanghai's industrial labor productivity and employment respectively, but did not study their interaction mechanism. It is an innovation to study from an integration perspective.(2) The Innovation of research methods. Using frontier production model, the paper has analyzed the influencing factors of Shanghai's industrial labor productivity theoretically; and some econometric methods, as relative labor productivity, DEA and so on comprehensively, the paper has discussed the influences of Shanghai's industrial labor productivity growth on employment during economic transition period. Meanwhile, the paper has demonstrated the relationship between labor productivity and employment growth at a micro-enterprise level through case studies.(3) The Innovation of research contents. This article aims to reveal the inner logic of the influences of Shanghai's industrial labor productivity growth on employment, and to identify ways or patterns promoting each other. First, the paper has discussed the "Paradox" of simultaneous growth of Shanghai's industrial labor productivity and employment by adopting economic growth and productivity measurement theory; Second, the paper tries to solve the "Paradox" by using the theory of industrial structure upgrading and labor turnover; Finally, the paper offers some specific policy recommendations for Shanghai's industrial, or even its economic development through an in-depth analysis on industrial labor productivity and employment during economic transition period.