Turning Point in the Labor Surplus Economy: Concept and Approach

Ryoshin Minami

Chapter 1 in Lewisian Turning Point in the Chinese Economy, 2014, pp 3-14 from Palgrave Macmillan

Abstract: Abstract In 2004 it was reported in Chinese media that migrant workers became scarce in the coastal urban areas and this pushed up their wages. At the same time, concerns were expressed about the possible negative effects on economic growth. China has long been heavily dependent on exports and foreign capital inflows: wage increases could deteriorate its global competitiveness in exports, thereby also discouraging capital inflows in the country. The migrant labor shortage, referred to as mingong huang , raised a heated debate among economists as to whether China had passed the Lewisian turning point (TP). However, there has been no reasonably comprehensive account of migrant worker shortages in urban areas, nor is there any empirically verifiable study on this issue. The Lewisian TP is a theoretical point in time in the Lewisian dualistic economy model when surplus labor in agriculture disappears due to its integration into the higher wage urban industries. Thus, the demarcation of TP cannot be determined without a methodologically valid empirical analysis of employment in agriculture and in urban industries.

Keywords: Foreign Direct Investment; Turning Point; Real Wage; Migrant Worker; Marginal Productivity (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-39726-3_1

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DOI: 10.1057/9781137397263_1

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