Salary Rise Could Promote Labor Productivity Increase:the Study Of The Existence And Threshold Effects

The interactive influence between salary rise and productivity increase and the momentum behind has long been a hot research focus. Salary rise corresponding to the productivity increase is a crucial insurance for the sustainable economic growth. This thesis is written based off from the facts and assumptions as follows:The labor compensation of Chinese citizens is riding on declining trend in the proportion of the primary distribution. There are between real salary increase and productivity growth. Five mechanisms to promote salary rise bringing up productivity are established on the basis of the research on concerning bibliography:The five mechanisms are factor substitution, technological innovation, and investment in human capital, efficiency wage. We also made analysis on related theories for each mechanism. We have made general summarization of the historic progress of rise and productivity increase in terms of ownership structure, industry, technological innovation, and investment in human capital, efficiency wages and using co-integration method we made the study on the relation between the productivity and salary. We established the VAR model to make impulse response analysis and variance decomposition for the relationship between them. According to Johansen Juselius’s conintegration test, labor productivity can explained by the linear combination with three independent variables, and is a stable equilibrium contact with these three variables. In VAR model, the coefficient of determination for each equation are higher than0.99. Vector autoregression (VAR) is a statistical model used to capture the linear interdependencies among multiple time series. Finally, we made an empirical analysis on the China as a whole and provincial-level panel data with the Hansen threshold regression model. We got the threshold value of wages promoting the enhancement of labor productivity and the differences between different provinces, and put forward tactics and suggestions on how to realize the synchronous increase of wages and labor productivity.