Research On The Contribution Of Labour Force To The Growth Of Economy

Rapid economic growth is always the primary aim in the economic reform policy of most of the countries. Along with the problems of lower birth rate and rapid aging of the labour in China,the issue of whether the new generation of labour could sustain and improve the economic growth through contributing of their labor force has been widely debate in the past two years. Theoretically,both the presence of a larger portion of labour to the population that continuing supplies sustainable labour force and lower expenses on social welfare could improve the return on capital of a country as well as the country’s saving rate,which in turn improve the capital formation.However, notwithstanding the fact that the China economy has been booming for the past ten years following the increase of the supply of labour force,the degree of contribution from the increase of the supply of labour force to the economic growth in China remains unclear and need to be discovered in this thesis.This thesis is divided into three major sections. Firstly, the review of the revolution of the western neoclassical theory of economic growth and the analysis of the scholars’ research on the relationship between the labour and economic growth. Secondly,the introduction of the status quo of China’s economic growth and labour force growth,and the use of curvilinear regression and panel data analysis to study the relationship. In this research,it is discovered that the investments in different industries,under the same and constant factors,will have different results in terms of the relationship with GDP growth. For instance, the increase in the percentage of labour force in the primary industry would reduce the GDP growth of a country. On the other hand, the increase in percentage of labour force in the secondary industry would bring a positive result to the GDP growth of a country. Thirdly, the study of the relationship between the GDP growth rate and the population growth rate of the provinces in China based on the statistical analysis methods. This study has been conducted on the larger provinces that attracts foreign labour force like the provinces of Jiangsu, Fujian and others.Based on the above conclusion, it is noticeable that following the factors of the improvement of technology and the internal migration of the labour within China, the input and output of the labour force tend to reach a balance, the old assumption o f the relationship between economic growth and population will eventually change, a nd the single influencing factor of the changes of population on the economic growth will be gradually decrease. The objective of this thesis is,through a comprehensive di scussion, to reintroduce the new relationship between the labour population and the e conomic growth and to serve as a reminder to all to appreciate the importance of the s aid relationship.