Structural Transformation And Supply And Demand Turning Point Of The Chinese Labor Market

The economic reform and opening-up promotes the growth of economy rapidly, creates a miracle of economic growth and improves people's lives significantly. At the same time, along with the economic reform, a large number of rural labor rushes to urban for work. The large-scale migration of labor from rural to coastal urban industry and services makes the price of labor cheaper than before. It has brought favorable conditions for the development of Chinese labor-intensive industries, and has attracted a great deal of foreign investment to promote China's economic development. However, at the beginning of 2004. the Pearl River Delta. Fujian. Zhejiang and other developed regions of the southeast witnessed a wide range of "labor shortage". After that. " labor shortage" spreads form the southern coastal areas to inland areas, which are traditional labor exporting areas. The labor market changes from unlimited supply to labor shortage. which prompts us to restudy the Chinese labor market.The process that developing countries changes from an unlimited supply of labor to labor shortages is called "Lewis turning point" in Development Economics. which is the dual economic structure transformation. With the development of economy passing over the Lewis turning point. the dual economic structure transformation goes into the accelerated phase. which also means it is time to solve the problem of inadequate transfer of rural labor, income inequality, labor rights and other issues. Therefore, we can analyze the stage of China's economic development. especially the characteristics of development by studying whether Chinese economy reaches the Lewis turning point, so that we can provide direction and development policy advices to China's future development model. Since the reform and opening-up, we have studied China's dual economy structure a lot.All the researches are in-depth and thorough. However, the researches which use modern measurement methods to analyze China's dual economy are relatively backward.So now it is theoretical and practical significance to study China's economic development by modern measurement methods. In this paper. we establish econometric models from agriculture. labor-intensive industry and the income gap aspects to demonstrate and test the Chinese labor market structural transformation. The paper is structured as follows. We describe the background and significance of the paper in the first part. The second part introduces the Lewis turning point theory. In the third part. we analyze the Lewis-Fei-Ranis model and the total agricultural output curve. The fourth part studies labor supply curves of the construction and manufacturing. The fifth part considers the Gini coefficient and Kuznets curve. The last part contains conclusions and policy recommendations.Conclusions are as follows:(i)In order to calculate the marginal product of agricultural labor we estimate the total agricultural output curve. And the marginal product are negative before 2006,turn positive in 2007, and increase rapidly after 2006:(ii)From the manufacturing and building trade's labor supply models, we can see that the labor supply curves upward raked after 2004:(iii) We also calculated Chinese urban, rural and national Gini coefficient. From the urban Kuznets curve, we can seen that the trend of the income gap has narrowed, indicating that the Chinese economic appeared phase changes. That is to say there is the turning point of Kuznets inverted U-curve in the economic. These empirical studies have shown that China passed the Lewis first turning point (shortage point), entered the stage of labor limited supply after 2006.As our economy passes over the "Lewis turning point", which means the arrival of the era of labor shortage, we should strengthen the policies to narrow the income gap. and adjust the national income distribution. Now industry should nurture agriculture and cities should promote rural. At the same time, we should implement agricultural industrialization and urbanization of rural policies. We can increase agricultural productivity to further divert rural labor and establish a unified urban and rural labor market to promote the development of human capital for the industrialization.