Employment Multiplier Effect Of Manufacturing Sector On Local Service Sector

Over the past thirty years,the growth of China's economic mainly depends on investment and exports of "three carriages",while the effect of domestic demand is weak,with the decline of employment level in manufacturing industry which is caused by continuously completed industrialization and the disappearance of Chinese demographic dividend,more and more,the creation of employment in future needs the expand of employment level in service industry.The data of national Bureau of statistics shows that by the end of 2015 employees in the service industry increased steadily,and became the main position of employment,the employment of service industry accounted for 42.4%the total employment,increases 6.3 percentage points higher than the end of 2012,and is 14%and 13.2%higher than the first industry and the second industry.From 2013 to 2015,the employment average of service industry annual has grown 5.8%annually and 5.5 percentage points higher than the total,the service sector has become the main force to boost the total social employment.But considering the transition to a service economy is mainly started from industrialization,especially from the rapid development of manufacturing industry,and in this new normal,the economic reform mainly relies on the reform and upgrade of industrial structure,and the adjustment of industrial structure are mainly concentrated in the manufacturing sector,so the research of multiplier effect between manufacturing employment and service employment is an important starting point.This paper mainly uses the theory and empirical research method of combining,firstly,makes analysis and supposition about the employment effect of manufacturing,reviews the previous literature research,and makes quantitative analysis and empirical examination on the basis of theoretical analysis.It does empirical research on the economic multiplier effect between the manufacturing employment and the service industry employment after establishing an appropriate econometric model.It firstly researches the average multiplier effect of employment,then researches the heterogeneity of the multiplier effect of employment,finally it finds the technical level of industry,area size and so on which are the influencing factors to the multiplier effect of employmentThe article mainly includes five parts:The first part is introduction which concludes the research background,research contents,research methods,possible innovations and deficiencies of the article.The second part summarizes and reviews the domestic and foreign scholars'research about employment multiplier the literature review.This part combing the relevant research literature from three aspects.The third part is the theoretical framework which including the theoretical hypothesis and theoretical analysis.This part analyzes the mechanism and influencing factors of the multiplier effect of the labor force in the manufacturing sector.At last,the theoretical hypothesis is put forwardThe fourth part is the empirical analysis of the multiplier effect of manufacturing employment on service industry employment.First,based on the Stata software,we use the provincial employment panel data in 2004-2014 to build the corresponding econometric models and the corresponding instrument variables.Secondly,the variables used in the model are analyzed trough the methods of descriptive analysis,correlation analysis and unit root test.Moreover,the average multiplier effect of manufacturing employment on local service employment is investigated.The heterogeneity of the multiplier effect of employment is investigated under the condition of different level of industry technology and different regional scale.Finally,the robustness test of the model is carried out.The fifth part is the conclusion and policy recommendations.We show that every time a local economy generates a new job by attracting a new business in the manufacturing sector,a significant number of additional jobs are created in the service sector.In various industries in the manufacturing industry,this multiplier effect is particularly large for jobs with high technology and for high human capital.The employment multiplier effect is also higher in labor intensive services sector.Besides,we find that the employment multiplier effect is influenced by regional scale.The regional scale is larger,the multiplier effect is bigger.