Analysis of China's Employment in Cities and Towns

By Yuan, Lin; Ke, Shang | Canadian Social Science, September 1, 2014 | Go to article overview

Analysis of China's Employment in Cities and Towns


Yuan, Lin, Ke, Shang, Canadian Social Science


Abstract

Since the reform in transitional economies, the status of labor market in China has changed a lot, and unemployment problem is becoming increasingly acute in cities and towns. By calculating the labor force participation rate and analyzing the migration of rural labor into cities and towns, this paper studies the unemployment problem in cities and towns from the aspect of labor supply.

From the aspect of labor demand, regression analysis is made to reveal the affecting relations between employment and economic growth. Based on the above analysis, this paper reveals reasons for china's employment problem in cities and towns and gives some policy advices, such as deepening reform in the state-owned enterprises and the adjustment of economy structure to keep a certain economic increasing rate, enforcing the macro-control of the employment, developing enterprises with medium or small sizes and the tertiary industry, and setting up service system in labor market to promote employment.

Key words: Employment; Labor supply; Labor demand

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

The employment is not only an economic problem but also a political issue. Employment has a vital bearing on people's livelihoods. It is the fundamental prerequisite and basic approach for people to improve their lives. China's employment regime has conducted into a market track since the reform and opening to the outside world. According to the State Council Information Office, China has a labor force of more than 1 billion people, and the number of people in employment is almost 780 million. The employment pressure is very great in china's cities and towns during the process of economic transition, and it has become a strenuous, arduous and urgent task to resolve. This paper makes an empirical study on the current supply and demand of labor force in china's cities and towns based on the statistical data, and give some policy advices to promote employment.

1. SUPPLY OF LABOR FORCE IN CHINA'S CITIES AND TOWNS

Based on the China's reality, if the amount of China's population is certain, there are two basic factors influencing the supply of labor force in cities and towns. Firstly, the labor force participate rate in cities and towns; secondly, the transferring rate of rural labor force from rural area to urban area. According to the data from the Population Census in 2010, China's population will keep rising until 2030. China's population will reach 1.45 billion in 2020 and 1.5 billion in 2030. At the same time, the ratio of the working-age population to the total population will change. Based on the number of population, we will make an analysis of the influence to the supply of labor force in cities and towns by the labor participation rate and the transferring rate.

1.1 Labor Force Participation Rate in Cities and Towns

The labor force participation rate indicates the proportion of the available "working age" population that is willing and able to work and is either employed or actively seeking employment. It is found by dividing the labor force (total civilian labor force) by the civilian population. The calculation of the labor force participation rate is officially given by this formula.

...

Table 1 provides the labor force participate rate in cities and towns in 1990, 2000 and 2005.

According to the Table 1, the labor force participate rate in cities and towns has fallen gradually from 74.47% in 1990 to 64.29% in 2010. It is worthwhile to note that the labor force participate rate of young people has dropped fast from 1990 to 2010. There has been a sharp decline in the labor force participate rate between the ages of 15-19 by 24.26%, and the picture is similar between the ages of 20 and 24. The development of higher education is a major factor in the decline of labor force participate rate. Higher educational reform since the late 1990s provides young people more and more opportunities to receive higher education. …

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