Study On Bearing Capacity Of China’s GDP Employment

From the economic history of most countries, the economic growth greatly influences the growth of employment. Since the reform and opening-up, China’s economic growth has maintained a strong momentum, with an annual growth rate of more than9%.China becomes the world’s second largest economy after the United States in2010.And this momentum will continue.While the economy has made great achievements, the employment situation, however, is not optimistic. It appears the situation of coexistence of high economic growth and low unemployment when urban unemployment remains high. Economic growth and full employment is the goal of macroeconomic policy. Thus, the severe employment situation in China has become the focus of the community. How to achieve the simultaneous growth of employment and the economy is the major problem which should be solved in the current time. How many employees Chinese economy can be accommodated, whether China comes to the economic carrying limit and the factors that affect the carrying capacity of the economy employment have become the focus of this research?Research method used in this paper includes theoretical analysis, empirical analysis, qualitative analysis and quantitative analysis. On the research of the relationship between economic growth and employment growth, the qualitative analysis and quantitative analysis are used. Through the comparison of employment capacity and employment carrying capacity, the author turns out a quantitative analysis of future employment. Qualitative analysis is used in this paper to analyze affecting factors while quantitative analysis is used for analysis of predicting results. Time series analysis method is adapted to establish time series ARMA model to predict the number of future employment and GDP. By comparing employment capacity with the number of jobs, whether employment carrying capacity in current exceeds the threshold is proved. The next step is to do Granger Causality Test, which proposes suggestions to solve employment and improve employment capacity from the point of factors affecting employment carrying capacity. Indicators of innovation are the main innovation of this paper. Indicators of innovation is not just about employment, but includes economic growth, which analyses the reasons why the coexistence of high economic growth and low employment appears in Chinese economy and more effectively explain the employment capacity that Chinese economic growth could carry.This paper, firstly, makes a descriptive analysis of the dynamic relationship between China’s economic growth and employment growth. According to study the trend graph of economic growth employment growth and elasticity calculations of employment, a conclusion can be drawn that China’s economic growth does not take an obvious role in promoting it’s employment growth. With the purpose of studying the reasons for the employment pressure, making an introduction of the concept of carrying capacity of employment and making predictive analysis of China’s employment carrying capacity of present and future, this paper compares the number of employment with the carrying capacity of economy and concludes that in the current economic circumstances employment in the secondary industry and tertiary industry is about to exceed the carrying capacity of the economy. Secondly, this paper analyses index affecting employment carrying capacity, which includes GDP、 government investment and the proportion of tertiary industry. Through establishing regression equation about employment capacity and influence index by the data from1981to2010, and studying the data stationary test, this paper finds the premise that satisfies integration test. By using the method of Engle-Granger to test the unit root of residual sequence of regression equation, the author concludes the stable relationship between independent variables and dependent variables, by which, we find that there are bidirectional Grainger causal relations between government、 investment and employment capacity. The tertiary industry proportion is the Grainger causal relation of employment capacity. That is to say, the tertiary industry proportion changes can cause the employment capacity changing. To sum up, we can see that increasing government investment and improving the proportion of the tertiary industry can improve the bearing capacity of employment. In addition, we can also take some other measures to increase the employment, for example, to speed up and cultivate the labor market; to improve employment services system in order to enhance labor mobility; to create employment opportunities; to increase the national policy on re-employment; to reform the household registration system in order to establish perfect labor market system; to create employment opportunities, etc. Although we have introduced many ways to solve the unemployment, limitated to the data we can obtain, we will consider adding some other index to study, such as, interest rate, the consumer price index, urbanization rate, the angel’s coefficient and gin coefficient, etc.