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Structural Change and Aggregate Employment Fluctuations in China

Wen Yao and Xiaodong Zhu

Working Papers from University of Toronto, Department of Economics

Abstract: In developed countries, aggregate employment is strongly pro-cyclical and almost as volatile as output. In China, the correlation of aggregate employment and output is close to zero, and the volatility of aggregate employment is very low. We argue that the key to understanding the aggregate employment fluctuations in China is the labour reallocation between the agricultural and non-agricultural sectors, and that income effect plays an important role in determining the labour reallocation dynamics in both the long-run and short-run.

Keywords: Structural Change; Income Effect; Labour Reallocation; Employment Fluctuations; China (search for similar items in EconPapers)
JEL-codes: E24 E32 O41 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2020-07-14
New Economics Papers: this item is included in nep-cna, nep-mac and nep-tid
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Citations: View citations in EconPapers (3)

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