The Empirical Analysis Of The Labor Supply Of The Poor Workers In China

The phenomenon of "forward-falling labor supply function in the very low wage" is often observed in the early stage of industrialized countries, as well as, developing countries. However, conventional neoclassical theory fails to explain this behavior, and just simply to see it as "exceptional". In this paper, through settling the related literature, we hope promote understanding on the behavior of labor supply. And then based on this work, this paper studied the behavior of the poor in China, the method of the research is empirical analysis.There are two big datasets. One is 《1995 shanghai migration worker》 data, estimations indicate that the labor supply curve of china poor workers is forward-falling. Using 《2002 urban household surveys》 (UHS) data, we found the inverted "S" shaped labor supply curve.In the last part of the paper , we analyse the impact of the minimum wage policy on the "forward-falling labor supply function. In a two-sector context, such a policy would increase wages in both the covered and uncovered sectors.