Research On The Threshold Effect Of Wages On Labor Supply

China is a country with a large labor force.The rational allocation and use of labor resources is one of the important driving forces for economic growth and social development.The demand for sufficient labor for high-quality economic development is self-evident.In recent years,China has entered a state of low population growth,gradually entered an aging society,and the "demographic dividend" has gradually declined.How to maintain adequate labor supply is an important issue.As the "leverage" in the labor market,wages have become the "invisible grabber" for labor supply and demand.On the one hand,wages and labor supply are both classic important topics of labor economics.On the other hand,China 's low average wage level and the structural shortage of labor supply are gradually emerging.The relationship between wages and labor supply is the current labor market operation and The key issue facing the effectiveness of population development is the manifestation of the theoretical importance and practical necessity of the relationship between wages and labor supply.According to the classic labor supply theory,wages,as one of the important elements in the labor market,have a certain effect on labor supply and demand.Both wages and labor supply are important components of the labor market and are related to the healthy operation of the labor market.For micro-individuals,due to the different industries they work in,each individual labor force has different economic development environments,or different career pursuits.The impact of wages on individual labor supply may reflect differences,which may be manifested in For different impact directions or different effects.Therefore,this research considers that,what kind of influence will wages have on labor supply decisions,and what is the logic and mechanism of wages' influence on labor supply? How to verify the threshold effect of wage on labor supply,and how to draw the labor supply curve of China according to the data? Has the classic labor supply curve appeared in the reality of our country,if there is no phenomenon of labor supply curve "bending backward",what is the reason behind? How to view the realistic significance and policy value of the influence of wages on labor supply,and what is the enlightenment of the significance and value of the wage threshold effect on the development of China's labor market and even economic development? This research will demonstrate and elaborate on the series of problems.This study takes labor supply as the research theme,and takes wages as the research focus.From a micro perspective,it explores the threshold effect of wages on labor supply.Based on the empirical analysis,it proposes certain policy recommendations for China's employment,wages,and labor supply.On the basis of accurately defining the meaning of wages and its measurement indicators,the concept of labor supply and its main analysis content,the meaning of threshold effect and its scope of use,it summarizes the existing research and classic literature and works,focusing on the discussion of wages and labor supply.According to the two dimensions of labor supply including "breadth" and "depth" proposed by Heckman(1993),this paper focuses on the specific impact of wages on the two dimensions of labor supply,namely "breadth" of labor supply and "depth" of labor supply.The main work is as follows: The first part is the status quo analysis,to integrate the current situation of labor supply,employment and wages in China,to sort out the current policies on labor supply,employment and wages;The second part is theoretical analysis,to explore the logical relationship between wages and labor supply at the theoretical level,and then The theoretical model and formation mechanism for deducing the relationship between the two;The third part is empirical analysis,the empirical analysis of the threshold effect of wages on labor supply,and meticulous research on the effect of wages on the labor supply of different labor groups;The fourth part is normative analysis,review and reflect on the threshold effect of wages on labor supply The practical significance and policy value provide reference suggestions for China's labor market policies.The main research process and findings of this paper are as follows:Status Analysis: In order to combine theory with reality,this part makes a targeted analysis of China's labor supply and wage policies,analyzes the basic facts of China's labor supply and wage with relevant data,and lays a realistic foundation for theoretical and empirical research.Studies have found that this part of the article as follows: First,in high quality and economic development under the background of promoting social progress and change of life and labor in our country is abundant in supply and overall employment situation is good,the labor participation rate in our country in 2018 was 76.22%,and the labor time at a higher level in the world,but since 2000,the labor participation rate continued to decline,"demographic dividend" attenuation trend;Second,the wage level has been increasing year by year along with the economic development.In 2018,the average salary of non-private employees in China's cities and towns reached 82,413 yuan,but it only accounted for about 30% of the average salary of OECD countries in the same year,and there is still a gap between the wage level and that of developed countries.Third,China has formed a relatively complete employment promotion system and wage management system,attached importance to the construction of working hours system,strengthened the minimum wage guarantee,and built a sustainable employment platform for workers.Theoretical Analysis: In order to clarify the internal relationship between wages and labor supply,the classical labor supply theoretical model was deduced,and the threshold effect element was added to establish the influence mechanism of wages and labor supply,laying a theoretical foundation for empirical analysis.The main findings of this part are as follows: First,the labor supply model is deduced to show that labor supply is a function of wages.With the help of calculus,the labor supply curve is regarded as a number of straight lines,the "threshold" thinking is introduced,and the corresponding inflection points and expressions are discussed.Second,the threshold model is introduced into the labor supply model,and the basic econometric model of the influence of wages on labor supply is established after joint derivation,which lays a foundation for empirical analysis.Third,by referring to the thought of system dynamics,it classifies and analyzes the influencing factors of labor supply theoretically,which provides a basis for the selection of control variables in the empirical analysis.Fourth,clarify the logical relationship of the influence of wages on labor supply,and establish the formation mechanism between wages and labor supply from the perspective of individual,family and economy.Empirical Analysis: In order to carefully examine wage change influence to the phases of labor supply decisions,based on dynamic survey of Chinese labor force microscopic database,this section from the labor supply "breadth" and "depth" two big wage perspective empirical analysis on the threshold of the labor supply effect,to "total sample-points sample-heterogeneity study" the order of the empirical analysis,empirical research takes up an important part of this article.Studies have found that this part of the article as follows: First,from the perspective of labor supply "breadth" wages of labor participation threshold effect,overall,the wages of labor participation have a significant positive incentives,three threshold values,in turn,increase wages,respectively to the database of respondents average wage of36.4%,65.7% and 77.1%,as the level of wages and salary threshold value has increased,the influence of the wages of labor participation increases gradually,threshold of triple wages,salary increase 1%,the probability of labourers to participate in the labor market up 9.4%;Second,from the perspective of labor supply "depth" wage for labor time threshold effect,overall,the wages of labor time have a significant positive incentives,three threshold values,in turn,increase wages,a heavy wage threshold value accounts for 29.1% of the respondents average wage,double salary threshold value is 19.9% above average wages,triple salary threshold value is nearly two times of average wage,salary of labor time influence coefficient as salary threshold has increased after the first increased,effect appears inverted "U" type,roughly triple salary threshold after salary incentive effect,the labor supply curve a tendency to "bend";Third,the wages of labor supply threshold effect exists heterogeneity area,industry and gender,the eastern region salary threshold value is higher,but the central and western regions of high salary incentive effect,in the high-end service industry and institution of wage threshold value is higher,male labor wage threshold is higher but the salary incentive effect is relatively low;Fourth,after the last wage threshold of labor force data,female labor force data and middle and high-end service labor force data in 2012,the wage incentive effect becomes negative,which indicates that the labor supply curve of some labor force groups in China may be "bending backward",but this situation has not been generally formed.Fifth,through the empirical analysis conclusion and the labor supply curve is found in our country,the salary threshold effect help improve labor supply decisions and micro individual work life idea,the adjustment of labor supply and labor market policies play a revelation,heterogeneity study to promote the free movement of Labour among regional industry,promote women and other vulnerable groups employment and wage protection,analyze the significance of reference to the different groups work life.Normative Analysis: In order to highlight the theoretical significance and practical value of the research,this section comprehensively judges and re-examines the theoretical and empirical analysis conclusions,and gives policy recommendations on the research conclusions.The main research findings in this section are: First,the existence of the wage threshold effect means that wages have a periodical effect on labor supply.The value of the wage threshold is close to the minimum wage standard and the average social wage level.The corporate wage system has certain policy implications.It provides an effective policy intervention perspective to alleviate the structural shortage of labor supply and employment structural contradictions in China,and provides optimal allocation suggestions for China's workers' micro-labour supply decisions.Second,The threshold effect of wages is the "reflective target" of the positioning of labor life,“frame of reference” for labor market policy and the "promoter" for high-quality economic development.The wage threshold effect is a representative indicator of the living conditions of workers and a direct reflection of living positioning.The market policy has certain enlightenment,and it has a certain guiding effect on workers' participation in decision-making and timing.It is conducive to stabilizing China's labor supply and employment level,and is conducive to helping China's high-quality economic development.Third,on the basis of making a reasonable judgment and re-rethinking of the wage threshold,combining relevant empirical analysis and China's national conditions,relevant suggestions and measures are proposed from the national policy level,the industrial enterprise level,and the micro individual level.Overall Conclusion of This Paper: Overall,combining with theoretical analysis and by using threshold model and the micro data to estimate that wages have periodic threshold significantly effect on labor supply,the classical theory is verified by Chinese realistic data.All kinds of threshold value and excitation effect reflects the laborer life attitude and provides the policy implications;On the whole,although the labor supply curve has a tendency of "bending backward",it does not actually "bending backward",which indicates that China's wage increase still significantly leads to the increase of labor supply.Labor force data for2012,female labor force and middle and high-end service industry labor force "bent backward",which means that some labor force in China began to pursue leisure,and this labor force generally has a higher wage level or more pursuit of life rather than work.At present,sufficient labor supply is a necessary condition for China's economic and social development.The threshold effect of wages on labor supply is conducive to improving individual labor supply decisions and working and living concepts,providing reference for China's labor market policies such as wage management,and providing ideas for solving the problem of labor structural shortage and promoting high-quality economic development.This research will be introduced to the threshold model innovation in wages and labor supply issues,the threshold effect into labor supply model,expand the micro labor economics application of threshold model,estimates the wages of labor supply mutation effect and salary incentive effects,reveals the salary threshold phenomenon,explore the effect of the wages of labor supply,has a certain theoretical and empirical significance.