Theoretical And Empirical Analysis Of Chinese Infrastructure Investment On Employment

Our country is a populous country, as China’s growing aging population,the effect of the demographic dividend is reducing, education and employment highlights the contradictions in recent years, which making the employment situation become a serious problem. According to Keynes: unemployment comes down owe to lack of effective demand, while lack of effective demand is caused by the marginal propensity to consume, diminishing marginal efficiency of capital and liquidity preference. The diminishing marginal propensity to consume caused insufficient consumption, while diminishing marginal efficiency of capital and liquidity preference causing underinvestment, meanwhile, property to consume is relatively stable, little change in the conditions of income would not change consumption,so scarcity of effective demand would only offset by increasing investment.Therefore, this paper is research the relationship between investment and employment. There are many classification of investment, different angles have different points system, this paper chooses the theoretical and empirical analysis of infrastructure investment impact on employment.This paper begins with a theoretical analyze the impact of infrastructure investment on employment, then, analysis the infrastructure investment and the employment status quo, at last then use the panel unit root tests, empirical research panel cointegration models and error correction model empirical analysis the country in various provinces and municipalities with its inter-provincial panel data, sample period from 1985 to 2014.In the long term, infrastructure investment increased 1 percent, causing 0.0863% employment increase, but the short-term fluctuations coefficient is-0.0063.That is to say, increase in short-term investment in infrastructure will be some way to produce a negative employment effect, will cause the amount of 0.0063% negative growth of employment, but affect the less forceful. According the panel data analysis, education funding for each 1% increase in employment can lead to 0.1122% of the rate of increase, but did not significantly affect expenditure on employment, wages and employment to changes exhibited insensitive. From a regional view, infrastructure investment can lead to every 1% increase in the central region of 0.0649 percent employment increase, but rising lesser than east. From the whole view, the explanatory variables were significant western regions by examining the positive impact of infrastructure investment on employment can bring 0.0501% of the increase or decrease in variation, slightly lower than the central region. Education funding, expenditure, average wages have a significant impact on employment.On the basis of theoretical and empirical analysis, the results of empirical analysis explained economics, infrastructure investment leading role in different areas of employment make a distinction, combine the status analysis, given the improvement of investment environment, adjusting the industrial structure, continue to promote infrastructure investment through multiple channels of investment, how to enhance the efficiency of infrastructure investment and guide the rational allocation of investment in infrastructure to be able to better promote the employment of policy recommendations.