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The Change of Labor Cost and Its Influencing Factors in China

Author: LuZuo
Tutor: SunZuoLin
School: Huazhong University of Science and Technology
Course: Quantitative Economics
Keywords: Labor cost Wage level Panel data
CLC: F249.21
Type: Master's thesis
Year: 2012
Downloads: 12
Quote: 0
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Abstract


The growth of labor cost in China has been one of the most concerns. The outlineof this article is the change of labor cost in our nation. This article surnmarizes the relevanttheory and systematically analyzes status of labor cost in our nation and factors influencinglabor cost growth from aspects of macro-economic level, which provides theoretical andpractical support for government.This paper selects the panel data of30provinces（except Tibet）and cities in Chinafrom1998to2010, and establishes the panel data model which is consisted of ninevariables: labor cost. working age population, GDP, industrialization. import and export,human capital investment, labor productivity, personal income tax policy, minimum wagesystem. We uses panel data unit root test, cointegration test, Hausman test，F test andpanel estimation for the empirical study about macro-economic factors influencing laborcost growth. The results of panel unit root test show that labor cost and other variables arefirst difference stationary variables; Panel cointegration test shows that all variable existsthe obvious co-integration relationship; Hausman test and F test shows that fixed effectmodel is the best choice；Panel estimation results show that each macro-economic variableexcept working age population and GDP has significant effect on labor cost. laborproductivity, human capital investment, minimum wage system, import and export havepositive effect on labor cost, and the degree of influence of the4variables become lowersuccessively.It has a great importance in guiding China’s policy, including strengtheningthe construction of system, improving the overall quality of workers，enhance internationalcompetitive advantage，optimizing industrial structures and so on.

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CLC: > Economic > Economic planning and management > Labor Economics > Countries in the world of labor economic profile > China > Labor force
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