Cai Fang: Approaching a Neoclassical Scenario: the Labor Market in China after the Lewis Turning Point

Abstract: As China passes through its Lewis Turning Point characterized first by the appearance of a labor shortage and a constant increase in wages, its labor market shows both features of the dual economy and neoclassical growth. This paper first depicts the trend of population as a root cause of the labor market transition from dual economy to neoclassical scenario. It then reveals the changed labor market profile – the labor shortage and wage increase. By examining three major groups of employment, namely, migrant workers, university graduates, and urban vulnerable workers, it tries to explore those unique characteristics of the labor market in such a transitional period and draws policy implications.

Keywords: Demographic transition; Lewis turning point; Labor market institutions

Source: China Finance and Economic Review, Volume 2, No.1, 2013

About the Author: Cai Fang, born in 1956, graduated from Remin University of China and Graduate School of Chinese Academy of Social Sciences (CASS). He holds Ph.D. in Economics. Currently he serves as member of Standing Committee and Agricultural and Rural Committee of the National People’s Congress of China, Academician of the Chinese Academy of Social Sciences and Director of the Institute of Population and Labor Economics, CASS, member of Global Agenda Council on Ageing and member of Population and the Planet Working Group, Royal Society. He published The Chinese Economy, The Lewis Turning Point, and he has been editing the Greenbook Series of Population and Labor.