Heterogeneous Labor, Job Matching And Income Gap

Chinese high speed development of economics did not give rise to a dominantincrease of employment in the long term. On the contrary, in the background of rapiddevolopment period with great changes of labor structure, education structure andeconomic structure, Chinese labor market is facing much more complicated problems.As a result, labor market’s principal contradiction is not only unempolyment. Instead,structure problems of unemployment and income gap become more serious. With theprogress of major economies, the heterogeneity of labor and market plays anincreasingly prominent role on economy, which generates a much complex matchingbetween labor and jobs and also expands income gap. In such a diversified andspecialized pattern, traditional economics approach with the hypothesis of laborhomogeneity can not solve such employment problems. And it seems too limited whenwe analyse the unbalanced labor market only in the view of number of labor forces. Inthis researchbased on the hypothesis of labor heterogeneity, we difined the meaning oflabor heterogeneity, then try to analyse the problems of structural unemployment andincome gap by different labor structure, by which to reveal the influence on unbalancedlabor market from some factors and improve the efficiency of job matching and incomedistribution.From the aspects ofresearch methods and contents, this research first begins withthe analysis of current situation of heterogeneous labor and market. By experienceestimation, distribution rule of labor supply and demand are revealed by labor qualityand quantity skewness distribution chart. Combination of the survey data of Ministry ofHuman Resources and Social Security, labor requirements’ difference of supply anddemand are showed. Then we demonstrate the different effects on labor supply anddemands by theoretical derivation, geometrical methods and empirical analysis. Andthen, thorough analyses are made on unbalanced labor markets by VES model, skillpremium theory, kill-capital complementary theory and empirical test. In addition,aiming to two disequilibrium points, the models of job matching and human resourcepricing are derived from two aspects. On one hand, modeling the job matching processwith extended DMP theory, optimum programming, game theory, calibration methodand survival event analysis are used to make job matching mechanism. On the otherhand, based on labor heterogeneity and industries’, regional, time difference, humanresource prcing model are made which including the risk and contribution of human resource, by making threshold panel data model to calculate the weight.From the aspects of theory and empirical research results, declining birth rate andchanging education structure are the vital factors for reduced speed of labor supply. Andbirth rate has a dominant crowding out affect on rural labor force which maybe thereason for “Minggonghuang”. In the terms of market heterogeneity, we shows thatthe complementary relationship between skilled labor and capital results in skill laborshortage.Under the interactive influence of labor and market heterogeneity, there aretwo reasons for the dismatching between labor structure and economy structure generateproblems of structural unemployment and income gap in labor market. First, capitalinvestment has a complementary impact on skilled labor, but also has a substitutedrelation with unskilled labor, which may lead structural difference between supply anddemand in the dual economy. Actually, in the problems of labor shortage andumemployment which is more serious depends on the bargain of technologydevelopment and labor heterogeneity. At the same time, capital deepening expands thethe gap between labor suppy and demand, and makes up the shortage of shortage ofhuman resource. To make sense of the income gap, it shows the inconsistencies betweenconvergence in income and structure of factor stocks. Limited by industry heterogeneityand market demand, the existence of labor heterogeneity between different industrieswould bridge the income gap. But in one industry, labor homogeneity would contributeto professional development. Besides, not making full use of highly educated labors inbusiness may lead to statistics of human resource artificially high, and result in a distortfrom technology-intensive industries to labor-intensive industry, which is another reasonfor increasing gap in incomes distribution.The contribution of this study is relaxing the suppose of labor homogeneity beforeresearch, making deeply research the different relationship betweem labor and capital,which explain the reason for dimatching of labor supply and demand and income gap.This approach makes the theory and empirical test much closer to real market and easierto reveal the structural problems. Meanwhile, from the view of labor heterogeneity, themechanism of job matching and wage matching are aim to the contradictory in labormarket, by which to propose much useful advice for employment, industryimprovement and population development. In addition, establishing human resourceprcing model which is easy to operate is another contribution of this study.