Research On Informal Employment In Regional Economic Growth Of Northeastern China

Defining informal employment and its role in regional economic and social development has always been a hot topic and focus of debate for both acdemic community and policy makers. However, more attracting attention than theoretic debate is that, in recent years, informal employment has played a vital role and become the most important urban employment channel and source of new jobs in developing, and even in developed countries. So far the attention in both academic and policy circles is still focused on quarrels over what is the nature of the phenominen, without effective and practical policy supports for imformal employment. In order to make clear what kind of internal relations existing between informal employment and regional economic growth, and to attract more society attention and to get policy supports for those informally employed, the paper choose informal employment in Heilongjiang,Jinlin and Liaoning Provinces in northeastern China (hereinafter refered to as "Northeastern China" throughout this paper) as research object, for the three northeastern provinces had once served as the nation's traditional old industrial bases, and had once been affected by restructuring effects and recently the global financial crisis. The paper conducts reserch on informal employment contributions to economic grouth as well as elments effecting informal employment, under the theoretic framework of informal employment and economic growth, and by comprehensively using informal employment scale estimation methods, questionaries, elasticity ananlysis, factor and regression analysis, national accounts methods, labour input methods, income GDP methods, labour demand and employment determinantion model, population prediction theory, etc. After that, the research evaluates current employment policy in the northeast, and makes needed recommendations, in attempt to provide theoretic and practical surpport for achieving both aims of regional economic rejuvenization and full employment.After constructing informal employment and economic growth theoretical framework based on employment and economic growth theory and theories on informal employment, it defined relative concepts in the research under the theory of informal employment and economic growth, providing theoretic basisi for clear research boundaries.Through use of several representative domestic and foreign statistical methods to estimate the size of informal employment, it assessed different statistical options to choose the optimal one. The scale of informal employment is calculated for Northeastern China and nationwide, and informal employment scale is compared within the three regions named Eastern, Middle and Western China. It shows that share of informal employment for both Liaoning in the Eastern region, where informal employment grows faster, as well as Jilin and Heilongjiang in the Middle China region, where informal employment grows relative slower, all reach as high as 1/3 in total employment, justifying that informal employment should receive dual attention.Through elexitisity and regression studys and by checks on relationships between economic growth and informal employment, comparison with formal employment found that in the transition period average annual growth rate of informal employment is higher than formal employment. Using sum of secondary and tertiary industries GDP as total urban total and thus calculate the urban informal employment labor productivity,we found that despite number of negative factors informal employment inharitates,it still has relatively high labor productivity, and could play significant role in economic development, as long as their development are strongly guided. Analysis reveals that informal employment focused on the tertiary industry, and mainly concentrated in the wholesale and retail trade, restaurants, transportation, storage and post and telecommunications industry, social services, etc. This was mainly because a number of other industries such financial sector, which has high threshold and limited access to private capital, causing labor mobility barriers. Using Japan as a developed country example to make international comparisons, we found similar phenomenon as in Northeastern China.In the analysis of informal employment contributions to economic growth in Northeastern China, Granger causality test is conducted to verify of the relationship between GDP growth and informal employment and in order to avoid the phenomenon of pseudo-regression; National accounts methods, labor input methods, and the gross domestic product income accounting principles were applied, use labor compensation share of GDP to estimate scale of informal economic activities from the income point of view.This will help improve quantitative methods for studying informal employment and economic growth. Analysis show that informal employment contribution to economic growth reach around 36%of total GDP in the region.Informal employment play an obvious role in promoting economic growth.Through constructing labor demand and employment decision model, and then,by using principal component analysis and regression analysis to identify the major factor, the paper conduct macro-level analysis on key factors affecting and key to informal employment decisions.These include detailed interpretation of investment distribution structure factors, industrial structure adjustment factors, labor factors, factors of wage levels, social security factors, labor relations and other factors, respectively. Secondly, when did factual study from micro-analysis point of view, the paper mainly use social stratification theory, the main body of informal employment is divided into three different levels, different levels of informal employment develops in different paths, and with different contributions and significance, which will help to promote informal employment as different types of measures are used for different levels of informal employment levels,.This will provide a useful exploration in the future development of informal employment.Thirdly, use case testing and analysis, field survey and interviews carried out to verify the impact of informal employment factors and their characteristics,so as to provide theoretical basis for the government to develop public policies in which economic growth and employment are both important.Finally, the paper deals with effective developments between informal employment and economic growth, that is how to resolve contradictions between efficiency and equity in informal employment, and how to reach hamoneous and orderly full employment goals which contributes to economic growth under a market economy condition. The paper puts forward informal employment optimization government policy matrix, which includes restructuring and upgrading regional industries, developing micro-enterprises and support entrepreneurship, improving labour skills to increase informal employment quality, building a standardized and orderly informal employment labor market, and strengthening economic support policies for informal employment.