| Since the reform and opening up, China’s processing has developed sharply, reflecting the strong competitiveness in accepting international division of labor in intra-product. Specialization can increase the efficiency and enlarge the scale of production. With the constant progress of science and technology, especially the falling cost of transportation and communication, division of labor in intra-product has become more detailed and the factor input of production has become more important than the whole product. For example, research and development, design and marketing of product belong to the human capital intensive, while the intermediate product assembly tends to be unskilled labor-intensive. When the multinational enterprises allocate the production globally to improve the competitiveness, the factor endowments in different areas of the world become more prominent. As one of the most abundant unskilled Labor endowment of the world, China has shifted the potential advantages into actual advantages through accepting the international division of labor in intra-product. The export value of China’s processing trade increased from＄1.13billion in1981to＄740.33billion in2010, becoming the world’s production base. Undertaking large-scale international division of labor in intra-product highly improved the demand of our unskilled Labor.At the same time, the dual economic structure in China has leaded dynamic changes in the labor market of urban. The rural department has transferred a large number of surplus labors into city departments, greatly changing the city’s unskilled Labor endowments. Once the process in which the rural labors transfer to the town reaches or is close to hitting the Lewis turning point, the city labor market can’t keep unlimited supplying of unskilled labor and the comparative advantage coming from factor endowment will change.This article based on an approach connecting the division of labor in intra-product and the dynamic changes of the dual Labor market, discusses the interactive influence between international division of labor and the dual labor market transformation.The first chapter is the research background and the second chapter is the literature review.The third chapter established a framework which analyzed the influence of supply and demand forces and institutions on city unskilled Labor market. Section one describes the transfer stages of rural surplus labor using statistics. Section two analyses how the international labor demand force including FDI affected the speed and scale of the rural labor transfer process. We finds that the processing trade export changes before the economic growth in China and thus influences the transfer of surplus agricultural labor in a multiplier way. In the third quarter, we compare the different way of rural labor transfer process without institutions limitation and under the institutions limitation. When there are labor transfer limitations, the unskilled labors earn more and have a higher employment in a short run, but massive unemployment would happen for many firms would exit or select bias technology intensive production technology. In the fourth quarter before three discussion, on the basis of open economy and the institutional constraints is established for unskilled Labor market impact of equilibrium analysis. Last section is facts verification.The fourth chapter estimated the size of labor division of intra-product undertaking by our country and its effect on employment. The first three sections used VSS ratio, BEC way of the ratio of the intermediate products and the processing trade proportion respectively. The advantage of VSS ratio is accurate because this way considers the complete consumption between the industries whose exports including imported components; BEC method has data year by year and thus provides a detailed change than VSS ratio way, which changes only in five years. Processing trade scale method can be a kind of further supplement and verification to the first two methods. The common conclusions are as follows:(1) The absolute size of the division of labor in intra-product we undertaking is enlarging, but in the first10years entering21st century, nearly all the industries’relative size of the division of labor in intra-product have shown a significant downward trend;(2) In2005, the per unit office, accounting and computer equipment export, foreign parts and semi-finished products accounted for74%, and per unit of radio, television and communication equipment export, foreign components and semi-finished products accounted for58%. These mean that there is a higher proportion of statistical illusion in China’s high-tech product export expansion and the independent production and export of high-tech products has not yet formed.Using OECD non-competitive input-output tables to estimate export-led employment, after deducting the foreign input, China’s exports drove employment for130million,140million and230million in1995,2000and2005and the net exports drove employment for27million,40million and43million. China’s trade structure is still labor net export type. If we do not consider completely consumed in intermediate inputs abroad, we will overestimate the effects caused by employment. For example, export-led employment will be overestimated by19.9%and net exports by16.9%in2000.The fifth chapter analyzed long-term effects of the division of labor in intra-product on relatively demand for skilled workers and unskilled workers using china’s macro data from1989to2010. Cointegration analysis showed that the relative supply of unskilled Labor in China had obviously negative correlation with relative income in the long term. That large-scale rural surplus labor force entered into the city labor market and lowed the relative supply of skilled workers under the dual economic structure transformation is an important factor to explain a marked increase in the relative wages. By way of processing trade in our country to participate in the division of labor in intra-product increased the relative demand of unskilled Labor and caused a decline in relative income gap of our country. Undertaking the division of labor in intra-product is an important channel to absorb the transfer of rural labor force in China.Using the provincial panel data from2001years after which year the relative supply of unskilled Labor has been tight, the sixth chapter estimated a short-term effect of the relative size of the unskilled labor force gathered in the province and the minimum wage on the provinces’processing trade export. Section one describes the unskilled Labor (the transfer of rural labor force) national supply less than demand structure after2001and the structure of work with the separation of domicile with statistical data. In the second section, we established the Labor market segmentation and gathering Migrant workers competition structure between provinces by a way of competitively adjusting provincial minimum wage level. The empirical with panel data from2002to2007found a positive relation between the secondary labor market scale and the provincial minimum wage.The third section firstly using the panel data of29provinces by26industries in2008found that the greater of the secondary labor market scale in a province, the processing trade exported higher industry would gain positive export advantage, and general trade account highly industry would have a negative impact in that province. Replace secondary labor market size with minimum wage, we then found the minimum wage had a positive relationship with processing trade exports. That is, when a provinces is higher in the minimum wage, it tend to be has a greater secondary labor market scale and has more advantages in the processing trade. The fourth section estimated the secondary labor market scale in the province and the minimum wage effect on the export of processing trade presents with29provinces’ panel data from2002to2007. As a province has a relatively larger secondary labor market or relatively higher minimum wage level, the province will export more products by way of processing trade. The mechanism of action of the positive contact is mainly due to the minimum wage in China is still in the stage of very low, which increase as a signal to attract relatively more low-cost labor under the relatively tight supply background. The fifth section is endogenous variables analysis by GMM.The last chapter is the conclusion of previous chapters. |
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