Migrant Workers Age-Group Productivity Gap Is Key to Verifying Lewis Turning Point in Chin＊

This paper uses age-related productivity gaps to analyze the Lewis turning point in China. The age-related productivity gap implies that under same wage rate, older and less productive rural laborers working in cities will earn less than the reservation wage. Thus, they may elect instead to return to the countryside. Therefore, this paper argues that while the supply of younger, high-productivity migrant workers fails demand and Lewis turning point emerges, there still exists a high volume of lower-productivity rural surplus labor.

Has the Lewis Turning Point Arrived in China?——Theoretical Analysis and International Experience

Using World Bank cross-country panel data to estimate the economic development level that corresponds to the Lewis turning point, we find that as GDP per capita increases, the share of rural labor in the total labor force tends to decrease first at an accelerated rate and then, after passing the Lewis turning point, at a reduced rate. Regression analysis of cross- country panel data shows that the Lewis turning point is reached when GDP per capita reaches somewhere between US$3,000 and US$4,000 dollars （PPP, constant international US dollars for the year 2000）. GDP per capita in China has exceeded this level, but the proportion of rural labor in the total labor force remains much higher than the average for countries at the same level of economic development. This may imply that there is still considerable potential for rural labor transfer in China.

Reassessing the Lewis Turning Point in China： Evidence from 70,000 Rural Households

There is no convincing evidence to prove that China＇s Lewis turning point （LTP） arrived in 2004-2005, as suggested in some of the existing literature. Employing data from the National Bureau of Statistics of China for 70,000 rural households and following the method proposed by Minami （1968） to identify the Lewis turning point in Japan, the present study reassessed the reaching of the LTP in China and found that China＇s economy reached the LTP around 2010. From a regional perspective, China ＂s eastern region reached the LTP in 2010 and its central and western regions are now approaching the turning point. After arriving at the LTP, China＇s rural economy will face three key tasks.＂ safeguarding grain security, promoting economic restructuring and realizing agricultural modernization. To cope with the shortage of human capital in agriculture production and the challenge of the tight balance between grain supply and demand, the Chinese Government should improve the human capital training system, accelerate agricultural modernization and guarantee national grain security.

Employment Structure,Lewis Turning Point and the Labor Share of Income:Theoretical and Empirical Analysis

In the context of the labor market segmentation in China and its reaching the Lewis turning point,this paper interprets the changing trend of the labor share of income in China from the changing perspective of the employment ownership structure.The theoretical analysis reveals that the labor share of income follows a U-shaped curve when the agricultural labor force gradually moves into the private and self-employed sectors.Using the Chinese provincial-level panel dataset between 1990 and 2016,our empirical study finds that there is a critical threshold.When the share of agricultural labor force is above this threshold value,the impact of the increase in the employment share of the urban private sector on the labor share of income is negative.In contrast,the impact becomes positive when the share of the agricultural labor force is less than or equal to this threshold value.Moreover,the impacts of other variables of employment ownership structure don’t show this kind of feature on both sides of this threshold value.The increase in the employment share of the urban private sector accounted for about 29.37%of the growing labor share of income between 2007 and 2016.This paper provides policy implications in the following four areas:institutional guarantee improvement,harmonious labor relations establishment,redistribution policy imposition and economic development pattern transformation.

Study on the Quantity and Age Structure of Rural Surplus Labor Force in China

Based on the data from the Second National Agriculture Census in 2006, this paper analyzed the absolute quantity and age structure of China rural surplus labor force by the classical approach. It showed that the migration of rural labor force was still far away from ＂Lewis turning point＂, and ＂mingong huang＂ （ shortage of peasant workforce） appearing in coastal areas could be explained with the location separation between the labor-intensive industries and rural labor force. It was a feasible and an effective way to push forward the transfer of labor-intensive industries from the east coast to central and Western China to absorb the abundant supply of rural labor force.

Hukou System Reform and Unification of Rural-urban Social Welfare

Using apolitical economy analytical framework, the present paper examines the hukou system reform in China. The potential unification of the social welfare system of rural and urban areas is discussed. The paper reviews the progress ofhukou system reform since 2004. It is suggested that since China met its Lewis turningpoint in about 2004, and a labor shortage became a limiting factor in production, there has been stronger demand for hukou system reform. In the meantime, various levels of government have apoint where incentives are compatibile for carrying out reforms. The paper also explores some limitations of the currently implemented reform in certain regions andputs forwardrelevantpolicy suggestions.

China's Urban Employment and Urbanization Rate:A Re-estimation

The present paper argues that China＇s existing population and employment statistics are misleading, and have failed to include many of the migrant and labor force flows between urban and rural areas. The paper reconciles the differences between official census data and other survey statistics and attempts to recalculate China＇s urban population and employment figures. Our analyses indicate that official statistics of 2012 underestimate China ＇s urban employment by approximately 47 million while overestimating rural employment by 31 million. The adjusted urbanization rate exceeded 55 percent in 2012, almost 3 percentage points higher than the official statistics. Nevertheless, there remains much potential for rural-to-urban migration. More specifically, if the current bottlenecks in household registration, social security and public welfare systems can be removed or relaxed, China＇s urbanization rate could rise by another l O percentage points or even more over the next decade.

Business Cycle in China since the Lehman Crisis:Interaction among Macroeconomic Policy,Economic Growth and Inflation

The major objectives of China＇s macroeconomic policy are to stabilize economic growth and inflation, which, in turn, are important factors determining key prices, such as the policy interest rate, the renminbi exchange rate and stockprices. In a framework that distinguishes different phases of the business cycle based on whether the current period＇s economic growth rate and inflation rate are above or below their ＂＇normal＂ values, this paper analyzes the interaction among macroeconomic policy, economic growth and inflation in China since the Lehman crisis, and the implications for these key prices. The path of China＇s economy indicates that stimulus measures taken by the government during the recession phase and tightening measures implemented during the overheating phase have helped minimize the fluctuation over the business cycle. Our analysis shows that Chinese authorities tend to rely more on adjusting the exchange rate than the interest rate to stabilize the economy. Comparing with conditions at the time of the post-Lehman recession, the current slowpace of economie growth in China may reflect not only weakening demand, but also a lowerpotential growth rate associated with the arrival of the Lewis turning point.