Impact Of Rising Labor Costs On The Skill Needs Of Firms

In recent years,China's economic growth has faced severe challenges brought by rising labor costs.On the one hand,since 2010,labor costs per capita have consistently exceeded GDP per capita.On the other hand,the competitiveness of the Chinese economy may be threatened by rising labor costs.As the demographic dividend gradually disappears,the increase in labor costs in China will gradually weaken the comparative advantage and international competitiveness in labor-intensive manufacturing.Based on the needs of economic restructuring,China's industrial upgrading requires a shift from labor-intensive to technology-intensive industries.In order to maintain sustainable economic growth,the Chinese economy needs to change from "Made in China" to "Innovation in China".The future growth depends more on the ability to increase productivity.However,there are some obstacles in China's economic transformation and there may be some difficulties in the transformation of the Chinese economy into an innovative economy.At present,there are obvious deficiencies in the development of human capital in China.Due to the lack of private ownership competition,the quality of education in China's state-owned sector is limited in terms of improvement,especially in terms of cultivating students' creativity and independent thinking.Due to unbalanced investment in urban and rural education,rising wages of unskilled workers have led to an increase in the cost of educational opportunities.Many rural students have dropped out of junior high school.How to successfully transform and upgrade enterprises is the focus of China's current economic research in the context of rising labor costs.Using the CEES data,the dynamic panel regression and intervention effect model study found that even if the increase in labor costs would bring about certain adverse effects,it would still have a positive effect on the output growth of enterprises.The increase in labor costs has a significant role in promoting output and productivity.At the same time,through the first-order differential model and the propensity score matching model,it is found that the increase in labor costs has a more significant"backward force" effect on enterprise innovation and transformation.Whether it is to adjust the labor force structure,capital investment in technological innovation,machine substitution or automated equipment purchases,all companies are actively responding to rising labor costs.However,through panel data regression,it is found that there is no obvious relationship between rising labor costs and corporate R&D innovation,and there is a significant positive effect between investment in capital and equipment.That is,compared with R&D and innovation,the factor substitution effect plays a greater role in the rising labor costs.The factor substitution effect is not a simple technical application but a technically biased technical progress.At the same time,under the data structure of the panel of the company and the employees' cross-section,empirical research shows that the factor substitution effect and R&D innovation of the company as a mechanism have a significant positive effect on the change of skill demand.With companies transforming,the skill needs of companies have changed significantly:on the one hand,changes in work tasks.According to the CEES study,employees'skill requirements are different in abstract,repetitive,and physical tasks.The demand for employees'skills gradually shifts from repeatability to abstraction.On the other hand,the introduction of numerical control machines and robots to the labor force English use ability,computer operation ability,management knowledge,etc.have higher requirements.In addition,micro-evidence from individuals in the labor force shows that the skills of the existing labor force can hardly meet the changing needs of the company's skills.Specifically,on the one hand,the education level of the labor force is quite different.Among them,84.68%of the employees did not receive education at or above the university level;on the other hand,there was a large gap between English skills,computer skills,management knowledge,and corporate requirements.Based on empirical research,the policy recommendations of this paper are:to further promote the equalization of educational resources,to improve the more competitive education system(to encourage public,private,and foreign investment in education),to build a relatively stable labor market,and to increase the investment in human capital of enterprises.excitation.