A quantitative analysis of China’s structural transformation

Robert Dekle () and Guillaume Vandenbroucke

No 2006-37, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: Between 1978 and 2003 the Chinese economy experienced a remarkable 5.7 percent annual growth of GDP per labor. At the same time, there has been a noticeable transformation of the economy: the share of workers in agriculture decreased from over 70 percent to less than 50 percent. We distinguish three sectors: private agriculture and nonagriculture and public nonagriculture. A growth accounting exercise reveals that the main source of growth was TFP in the private nonagricultural sector. The reallocation of labor from agriculture to nonagriculture accounted for 1.9 percent out of the 5.7 percent growth in output per labor. The reallocation of labor from the public to the private sector also accounted for a significant part of growth in the 1996-2003 period. We calibrate a general equilibrium model where the driving forces are public investment and employment, as well as sectorial TFP derived from our growth accounting exercise. The model tracks the historical employment share of agriculture and the labor productivities of all three sectors quite well.

Keywords: China (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-cna, nep-dev, nep-sea and nep-tra
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: A quantitative analysis of China's structural transformation (2012)
Journal Article: A quantitative analysis of China’s structural transformation (2006)
Working Paper: A Quantitative Analysis of China’s Structural Transformation (2006)
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