Determinants Of The Employment Elasticity For China's Industrial Enterprises

Year 2009 could be the most difficult one since the millennium for China's economy. Chinese government had set 8% as his bottom-line for the growth rate of GDP, and finally it came to be 8.7%. However, did the economy recovery truly stimulate the labor market? Data shows that the GDP elasticity of employment is becoming lower and lower in China since 1990. This means the economy growth no longer brings as much job opportunity as it used to be.With the panel data of the industrial enterprises above designated size in China, this paper study the trend of their employment elasticity and try to explore the decisive factors for its divergence. By using descriptive statistics, ANOVA and linear regression, we argued that region, industry, state ownership etc. are key factors to the employment elasticity of these firms. Based on this point, we suggest that Chinese government should cut off the redundant infrastructure construction, and encourage the investment of private enterprises.