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Research on the Okun’ Paradox in China: From Chinese Dual Economic Structure

Author: GengYuan
Tutor: LinZuoZuo
School: Beijing Jiaotong University
Course: Labor Economics
Keywords: Okun 's Law Economic growth Dual Economy Demographic dividend Labor force participation rate
CLC: F224
Type: Master's thesis
Year: 2009
Downloads: 206
Quote: 0
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According to Okun 's law, a country's economic growth can absorb more labor , thereby stimulating domestic employment levels simultaneously increased. However, in terms of the actual situation of China's reform and opening up, China 's economy maintained rapid growth did not bring employment growth and the unemployment rate declined rapidly , that there has been \This paper argues that the potential prerequisite Okun's law is a relatively mature market mechanisms and economic structure of a dollar , while China does not have such a market economic base. Transition period , China 's economic and employment situation is very complex, and the application of Okun's law in China must comply with China 's basic national conditions. At this stage, China has a dual economic and institutional transition particularity . In this case , on the one hand , labor supply is infinite , that there is a huge demographic dividend ; the other hand, when compared with other countries , China 's labor force participation rate is generally high , between urban and rural labor force participation rates and the level of employment has a greater difference. By analyzing the Chinese demographic dividend , the labor force participation rate and the actual characteristics of economic growth , this paper discusses the capital -driven economic model of economic growth to absorb the effects on employment . On this basis , combined with the dual economy theory and China 's actual situation, Oquendo model was revised and expanded . The research shows that China is in a stage of the first phase of Okun's model , that is, economic growth and employment growth in the relationship between changes inversely with the market economy continues to improve and perfect , China will enter the first Okun model two stages, namely, economic growth will bring jobs simultaneously increased. Based on the analysis of the reasons , this paper Okun's law a special performance in China , and further proposes ease employment pressure China to enhance role in promoting economic growth, employment measures and suggestions .

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