The Evolving Pattern of the Wage-Labor Productivity Nexus in China: Evidence from Manufacturing Firm-Level Data

Posted: 14 Oct 2015

See all articles by Jun Zhang

Jun Zhang

Fudan University - China Center for Economic Studies (CCES)

Xiaofeng Liu

Fudan University - School of Economics

Abstract

By employing a large dataset of nation-wide state-owned and non-state-owned manufacturing enterprises in the period 1998-2007, this paper analyzes the evolving pattern of the correlation and spread between wages and labor productivity in China's manufacturing sector and its influence factors. We find that although a significant positive correlation between wages and labor productivity in manufacturing firms exists, this positive nexus has become weak and loose. We also find that, since the 1990s, the labor productivity of Chinese manufacturing enterprises has gained a much greater growth rate than that of the wage level, and therefore the spread between wages and labor productivity has been widening over time. A variety of factors that have influenced the wage-labor productivity nexus of Chinese manufacturing enterprises are identified and discussed with regression models.

Keywords: Wage, Labor productivity, Manufacturing enterprises, China

JEL Classification: J31, O47

Suggested Citation

Zhang, Jun and Liu, Xiaofeng, The Evolving Pattern of the Wage-Labor Productivity Nexus in China: Evidence from Manufacturing Firm-Level Data. Economic Systems, Vol. 37, No. 3, 2013, Available at SSRN: https://ssrn.com/abstract=2673534

Jun Zhang (Contact Author)

Fudan University - China Center for Economic Studies (CCES) ( email )

China

Xiaofeng Liu

Fudan University - School of Economics ( email )

600 GuoQuan Road
Shanghai, 200433
China

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