The Research On Macroeconomic Effects Of Labor Supply From The Perspective Of Search Friction

Since the reform and opening up,the development mode of relying on low price industrialization has expanded the employment scale of China's labor market and made an important contribution to the rapid growth of China's economy.However,along with our country economy into the stage of the new normal,ever rely on low-end labour supply quantity in order to promote the economic growth mode is losing its vitality,shortage of labor supply and structural mismatch problems appeared gradually,the labour market search friction is also increasing,the search for friction effect and labour supply factors impact on macroeconomic has increasingly become the important research topics of academic and policy authorities.But,a survey of the existing studies at home and abroad shows that there are few literatures that put the search friction,labor supply and macroeconomic cycle fluctuation in a unified analysis framework at the same time,and the research on the macroeconomic effects of search friction and labor supply is still lack of systematization.In view of this,based on the new Keynesian DSGE model,this paper systematically studies the macroeconomic effects of labor supply from the perspective of search friction.This not only enriches the relevant economic theories,but also provides a solid academic support for the government to formulate targeted macro-control policies.Therefore,this research has important theoretical significance and practical value.First,on the basis of systematically sorting out and summarizing the research on the macroeconomic effect of labor supply from the perspective of search friction,this paper investigates the macroeconomic effects of homogeneous labor supply from the perspective of search friction by constructing a new Keynesian DSGE model that includes the characteristics of search friction and homogeneous labor supply.The results show that wage stickiness exists in China's labor market,and the search friction and separation effect of the market is strong.Labor productivity shock can explain about 15% of output fluctuations,and its contribution to the fluctuation variance of major labor market variables such as employment and job vacancy is basically above 50%.Compared with the model of no labor productivity shock and wage stickiness,the impact of labor productivity shock on output and employment is larger and the impact on wages is more moderate under the benchmark model.When wage stickiness and labor productivity shock act together,they can deepen the impact of external shocks such as monetary policy on macroeconomic fluctuations.The higher the degree of wage stickiness in the market,the greater the loss of social welfare;The direct welfare loss caused by labor productivity shock is low,but the indirect welfare loss caused by enhancing exogenous shock is high.Secondly,by dividing labor supply into homogeneous labor supply and heterogeneous labor supply,a new Keynesian DSGE model with characteristics of search friction and heterogeneous labor supply was constructed,and the macroeconomic effect of heterogeneous labor supply from the perspective of search friction was analyzed by using this model.The results show that the general equilibrium model,which includes both heterogeneous labor supply and wage stickiness,is better than the homogeneous labor supply and wage stickiness model in describing the fluctuation of Chinese economy,especially in the period of economic stability.Heterogeneous labor supply and wage stickiness can enlarge the technology shock and impact on the role of economic fluctuation,and on the impact of monetary policy effect is very limited,and in the absence of wage stickiness and the heterogeneous labor supply situation,investment impact contribution has shrunk,technology impact and contribution with the impact of government spending.Heterogeneous labor supply magnifies the impact of external shocks on the macro economy through workers' search efficiency and unemployment duration,while wage stickiness magnifies the impact of technological shocks through workers' bargaining power and equilibrium Nash surplus value.Thirdly,by further incorporating fiscal policy tools into a DSGE model that includes both search friction and labor supply factors,the influence of labor supply on optimal structural fiscal policy choices under search friction is studied.The results show that the proactive fiscal policy can squeeze into the economy in the short term,but the mechanism and effect of different fiscal policy tools on the macro economy are quite different.For the three types of fiscal spending tools,increasing government consumption spending has the shortest duration of crowding out output,while government investment spending has the most obvious crowding out effect on the economy,but it also has a greater crowding out effect on market employment and output in the long run.In contrast,the increase of transfer payments in the long run will neither squeeze out aggregate private consumption nor significantly squeeze out total employment and output.For the three types of tax policies,the implementation of the consumption tax reduction policy can crowd out household consumption in the long term,but also output and employment to a certain extent,while the labor tax reduction policy can crowd out household employment in the short term,but the impact on output and household consumption is relatively weak.By contrast,tax cuts on capital can not only squeeze into the macro economy for a longer period of time,but also stabilize household consumption and employment in the long run to some extent.In addition,compared with the homogeneous labor supply model,the crowding effect of fiscal policy in the case of heterogeneous labor supply is more significant and more effective,mainly by changing the family marginal utility tendency and the level of interest rates to influence family consumption and investment,and eventually spread and enlarge the influence of fiscal policy impact on the whole macro economy.No matter under which model,on the whole,the social welfare effect of fiscal expenditure tool is greater than that of fiscal tax tool,and the overall social welfare effect of fiscal policy tool under heterogeneous labor supply model is greater than that under homogeneous labor supply model.Heterogeneity can labor supply behavior of fiscal policy tools of economic growth and economic stability effect and influence,so to a certain extent,affected the policy tool of the optimality choice,and under the condition of heterogeneous labor supply,capital tax and even can promote economic growth and government investment tools,the government transfer payment of taxes and labor tools economic stability effect is stronger.Finally,by constructing a DSGE model that includes both search friction,labor supply and monetary policy impact,this paper discusses the influence of labor supply on the effectiveness of monetary policy from the perspective of search friction.The results show that compared with the model that includes both search friction,homogeneous labor supply and monetary policy shock,the model that includes search friction,heterogeneous labor supply and monetary policy shock has a larger fluctuation range of output and employment,while the fluctuation range of residents' consumption depends on the comprehensive effect of substitution effect and income effect.Heterogeneous labor supply mainly influences the substitution effect and income effect through price channels such as interest rate,wage and marginal propensity to consume,thereby affecting household consumption and employment,and finally disseminating the impact of exogenous shocks on the overall macroeconomic fluctuations.Heterogeneous labor supply will lead to more social welfare losses and reduce the effectiveness of monetary policy;Compared with quantitative monetary policy,structural monetary policy and price monetary policy have more obvious responses to two heterogeneous labor supply parameters.Based on the above research conclusions,this paper holds that the government can reduce the search friction effect of labor market by removing various institutional barriers to the free movement of labor and establishing flexible wage adjustment mechanism,can eliminate the impact of labour supply factors by promoting the expansion and improvement of labor supply quantity and quality and continuously improving the labor market employment protection and security system,can eliminate the negative effects of labor supply factors on fiscal policy and monetary policy tools by paying attention to the effect of heterogeneous labor supply on the propagation and amplification of fiscal policy shock,and dredging the propagation channels of monetary policy in the labor market,To promote the steady,sustained and healthy development of China's economy.