Research On The Formation Mechanism Of Labor Factor Price Distortion And Effect Of Industrial Upgrading

The relationship between work and remuneration is a long standing issue of economics,many scholars try to explain the deviation of productivity and remuneration.At present,China is facing great changes that have not been seen in a century.Economic development is in a critical period of transformation,facing unprecedented development opportunities and challenges.In particular,the lack of domestic consumption caused by the price distortion of labor factors has posed a serious challenge to the realization of common prosperity and the construction of a dual cycle development pattern.Therefore,it is urgent to deeply investigate the causes of labor factor price distortion and its impact on industrial upgrading,so as to promote the improvement of labor factor price distortion.Based on the above considerations,based on the accurate grasp of the current situation,this paper will focus on the research on the formation mechanism of labor factor price distortion and the effect of industrial upgrading.Firstly,this paper systematically investigates the distortion of labor factor price and the current situation of industrial upgrading.On the one hand,this paper uses the time-varying elastic production function method to calculate the national and local labor factor price distortion.The results show that since the reform and opening up,the distortion of labor factor prices in China has shown an overall downward trend,which can be divided into four stages: the rapid and continuous decline of the distortion of labor factor prices during 1978 and 1983,the expansion of the distortion during 1984 and 1998,the further decline of the distortion during 1999 and 2012,and the stable low level of the distortion since 2013.On the other hand,by comprehensively examining the changing characteristics of industrial structure,employment structure and demand structure since the reform and opening up,the upgrading of China’s industrial structure can be roughly divided into three stages.From 1978 to 1985 it was the stage of "one slow and two fast",from 1986 to 2012 it was the stage of "two backward and three forward",and since 2012 the economic structure upgrading has been lead by service industry.Secondly,by constructing a theoretical model that can explain the formation mechanism of labor factor price distortion,the mechanism of government factors,market factors and factors themselves on labor factor price distortion are investigated,and the main conclusions of theoretical analysis are tested by taking China’s listed companies from 2013 to2019 as research samples.The results show that factor factors,market factors and government factors all have significant impacts on labor factor price distortion,but there are certain differences due to systems of ownership,industries and regions.Further,this paper applies Chenery theory of industrial development stages and lewis’ dual economy theory,and the period of economy development is divided into two stages,which are "transition from traditional society to the industrialization initial step period" and "transition from early stage of industrialization to industrialization mid-to-late period".At different stages of development,the labor price distortion effect on two department of labor resource allocation is discussed respectively,as well as how they impact the overall economic output and industrial upgrading progress,it theoretically explains that the impact of labor factor price distortion on industrial upgrading varies in different development stages.On this basis,VAR model is used to test the theoretical analysis,and the results show that although the distortion of labor factor price can promote economic growth in the short term,it will inevitably have a negative impact on industrial upgrading in the medium and long term.Based on the above theoretical and empirical research and combined with the experience of typical foreign countries,this paper combs and summarizes the measures to protect the rights and interests of workers in typical countries from the aspects of promoting the flow of labor factors,improving the quality of labor factors,improving the bargaining power of labor factors,protecting the basic rights and interests of workers,strengthening the protection of vulnerable groups and increasing the replacement cost of labor factors,Put forward policy suggestions to improve the price distortion of labor factors in line with China’s national conditions at the present stage,so as to provide basis for relevant policy-making.