A Research On Chinese Labor Force Price Distortions

Labor resources is a factor of production in economic activities, and Price is the most critical market signals to guide the allocation of resources. In the beginning of Reform and opening up, economic policy is one of the reasons that lead to the distortions of labor factor price. As an agricultural country with large population size, China's major advantages of participation in the world division of labor is a huge "demographic dividend". Therefore, deliberately distorting the price of the labor factor has important practical significance in solving the employment of agricultural surplus labor force and actively participate in the world economic division. However, with the gradual completion of capital accumulation and labor supply reduced, the negative effect of the labor factor price distortions began to appear gradually. The economic policy of distorting price of factor labor reduced the leverage effect of price in adjusting resource allocation and destroyed the system of free competition in the market. Specifically, it reduced the wish to improve the quality of labor factor, and hindered the pace of industrial upgrading. At the same time labor factor is always in a weak position of Income distribution. This is further affected the consumer's role in promoting the economy, and increased social security burden of the government. Therefore, it has great significance to evaluate the market price of the labor factor properly.The research of this paper was based on profound theoretical knowledge, and it has a In-depth study on China's labor factor price distortions. This paper used a variety of research methods, such as theoretical analysis and empirical analysis, qualitative analysis and quantitative analysis.This paper was divided into three parts. In the first part of the article, it discussed the research background and significance, summarized previous research results comprehensively and defined the scope of the study and related concepts. And it is a solid theoretical basis of this paper. In part two:Firstly it showed the distortion of the labor factor prices, calculated the extent of the labor factor price distortions using China's industrial enterprises statistics in macroeconomic. Second, it analyzed the economic effects of labor factor price distortions in five aspects, such as labor quality, industrial structure, labor employment, labor social security and so on. Finally it explored the reasons. In part three it supplied policy recommendations to optimize the labor market environment and improve the labor market mechanism.