The Impact Of Labor Skill Promotion On The Upgrading Of China’s Manufacturing Industry

Since the reform and opening-up,China has successfully seized the opportunity of economic globalization.With the advantage of a large number of low-cost labors,China has rapidly established the labor-intensive manufacturing industry,surpassing the United States to become the world’s largest manufacturing country in 2010.In 2012,China’s aggregate volume of labor resources began to decline,while the annual GDP growth rate dropped below 8%,which became an important symbol of the disappearance of the "demographic dividend" and the emergence of the "Lewis inflection point".Since then,China’s labor costs have shown a rapid upward trend.The disappearance of the "demographic dividend" and the rise of labor costs have forced China’s manufacturing industry to upgrade from the low-end to high-end.While losing the "demographic dividend",China is facing the "talent dividend".After the expansion of university enrollment in 1999,and entering the 21 st century,the overall quality of China’s labors is rapidly improving.The improvement of labor skill structure meets the requirements of the upgrading of the manufacturing industry characterized by the wide application of information and intelligent technology,and is expected to help China become a powerful manufacturing country in the fourth industrial revolution.Based on this,this paper studies the impact of labor skill promotion(the increasing proportion of the high-skilled labor)on the upgrading of China’s manufacturing industry.This paper mainly studies the impact of skilled labor supply,skilled labor allocation and skilled labor consumption externality on the upgrading of China’s manufacturing industry.The main conclusions are as follows:Firstly,the increasing proportion of the high-skilled labor has indeed promoted the upgrading of the manufacturing industry structure.Based on the theoretical model by Ju et al.(2015),this dissertation illustrates the impact mechanism of the labor skill promotion on the upgrading of manufacturing industry structure,and then uses the province-industrial unbalanced panel data from 2005 to 2016 to investigate it.The study finds that the proportion of the high-skilled labor in China is increasing year by year,which promotes the upgrading of manufacturing industrial structure.However,the regression results of different regions show that the role of high-skilled labors in promoting the upgrading of manufacturing industry only exists in the eastern region,which may be caused by the different stages of industrialization.Eastern China is in the late stage of industrialization,which is an important period of the high-end manufacturing industry development,and therefore needs a large number of high-skilled labors.Most provinces of the central and western regions are still in the middle stage of industrialization,which is still dominated by labor-intensive and resource-dependent industries that are more sensitive to labor costs and the abundance of natural resources.Further mechanism analysis shows that,compared with the low-end manufacturing industry,the upgrading of labor skill structure promotes the improvement of labor productivity and profit in the high-end manufacturing industry,and then promotes the allocation of factors to the high-end manufacturing industry,which triggers the upgrading of the manufacturing industrial structure.At the same time,this dissertation also finds that the upgrading of labor skill structure has no significant impact on the improvement of the overall innovation ability of manufacturing industry,which means that high-skilled labors at this stage may only be working in digesting and absorbing existing technology,and have little contribution to technology innovation.Secondly,the cross regional flow of high-skilled labors promotes the informatization level of local manufacturing enterprises.In the information age,one way to deal with the rising labor cost is to upgrade production lines by replacing labors with machines.So,the industrial microcomputer is indispensable.In this dissertation,the number of computers per hundred people as the measurement of manufacturing informatization,and is used to examine the effect of skilled labors allocation on the informatization upgrading of the manufacturing industry.Based on the database matching the county data of the Fifth National Census with the data of China’s industrial enterprises in 2004 and the provincial database in 2013-2017,this dissertation finds that before 2008,every standard deviation increase in population inflow will increase the average computer usage of local enterprises by about 10.55%.After 2008,the population inflow has no significant impact on the level of enterprise informatization measured by the number of computers per capita,but it has significantly promoted the development of e-commerce.Each additional standard deviation of the population inflow increases the proportion of enterprises engaged in e-commerce by 6.3%.It shows that the impact of population inflow on enterprise informatization has changed from simple equipment informatization to business model informatization.The further analysis of the mechanism shows that the overall education level of immigrants is not high,but the proportion of the high-skilled population in the immigrant is not only higher than the average level of society,even higher than the local urban population.It is the inflow of these talents to promote the upgrading of manufacturing information.Finally,the increasing proportion of the high-skilled labor can not only affect the upgrading of the manufacturing industry directly,but also affect it through the spillover effect indirectly.Firstly,this dissertation constructs a two-sector theoretical model including manufacturing and service industries,and explains the influence mechanism of skilled labor consumption externality on the upgrading of the manufacturing industry structure.Then,it investigates the mechanism based on province-industrial data from 2005 to 2016 and CHIP data.The study finds that the increasing proportion of the high-skilled labor promotes the development of living service industry through the consumption externality,and then impels the upgrading of manufacturing industry structure under the employment substitution effect.Specifically,driven by the specialization of labor division,the increasing proportion of high-skilled labors leads to the demand for the life service industry,promotes the rise of wages of low-skilled labors,thus forcing labor-intensive low-end manufacturing industry to transform or withdraw.In addition,the increasing supply of the high-skilled labor may directly promote the development of production service industry,and then promote the upgrading of manufacturing industry,but this dissertation does not prove it based on province-industrial data.The above conclusions support the hypothesis of skilled labor consumption externality,indicating that skilled talents are of great significance to the upgrading of China’s manufacturing industry.