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Analysis on Labor and Wages During the Transition Period of China and Choice of Industrialization

Author: FanXiaoNi
Tutor: WuLiGuang
School: Jinan University
Course: International Trade
Keywords: labor surplus wage growth industrialization labor biased technological progress
CLC: F249.2;F424
Type: Master's thesis
Year: 2010
Downloads: 66
Quote: 0
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Abstract


Based on the judgement of the surplus of labor and the trend of wage growth, this article points out that the classical theory of wages, which denies wage growth, and the neo-classical theory, which denies the labor surplus, are not in line with the status of the process of China’s industrialization. China is now in the dilemma of the coexistence of the labor surplus and wage growth. By analyzing the impact of the trend of wage growth on the industrial capital accumulation, this article points out that China’s industrialization, which has always been dependent on low wages, is not sustainable. China’s industrialization must depend on technological progress. By analyzing the traditional technological progress pattern’s exclusion on employment, it points out the difficulties of the approach to accomplishing industrialization. Based on the endowment of labor force surplus and capital shortage, this article points out that the existing model of the one-sided emphasis on the speed of technological progress and capital accumulation should be transferred into the promotion of the labor biased technological progress. Due to the role of spontaneous market forces, the upward trend in wages tends to induce labor-saving technological progress, and thus make industrialization return to the old traditional road. Therefore, the Government is supposed to function in the process of industrial transfer and the choice of leading industry, provide technological guidelines for factor markets and institutional innovation policy, to extend the life cycle of labor-intensive industries, to correct the reverse inducement of wage growth on labor biased technological progress, and to provide labor biased technological progress with an industrial platform.

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CLC: > Economic > Industrial economy > China Industrial Economy > Industrial construction and development
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