Analysis Of The Labor Emplyment Policy In China Based On The CGE Model

As the basic of people’s lives, employment has been the primary thing which ChineseGovernment and people pay attention. With the adjustment of industrial structure and theadvance of urbanization, it will inevitably be require the expansion of employment under thecondition of socialist market economy of China. And Expanding the employment space ofdifferent industries in reason, optimizing labor resources among and within three industries, isthe key to the benign interaction between economic growth and employment enlargement.Compared to other model, such as Vector Autoregressive (VAR), Computable GeneralEquilibrium (CGE) with solid microeconomic foundation, can be regarded as the model ofpoor statistical but good theoretical. It reflects the role of market mechanism, but alsoembodies the universal connection between the different economic entities and the differentdepartments in the economic system. Together with its coordinated interaction mechanism ofeconomic system, the CGE model becomes quite an effective tool of macroeconomicanalysis.The paper assumes that the CGE model of the labor market is non-perfect competitionand constructs a CGE model which is used to analyze the labor employment situation inChina. The paper uses this model to simulate the impact on macro-economy which are causedby the changes of the employment structure，so that some policy basis can be proposed toimplement proper configuration of the workforce resource and the benign interaction betweeneconomic growth and employment enlargement.According to the problem solving process by CGE model, the main structure of thispaper includes the development and principle of CGE model, the CGE model equations usedto analyze the labor employment situation in China, the construction and regulation of theSocial Accounting Matrix used to analyze the labor employment situation in China, theestimation of model parameter, the analysis of employment policies and the forecast ofemployment trends in China, programming solution under GAMS condition and the analysisof the results of policy simulation.The policy simulation results are mainly displayed through the total supply, total output, the added value, the revenue and consumption of government, the revenue and consumptionof household, the revenue and consumption of enterprise, the import volume and the exportvolume, and so on. The main conclusions are summarized from the changes of each index inthe policy simulation results. It can be concluded from the policy simulation results that thechanges of the employment structure caused by the industrial restructuring and the transfer ofurban and rural workforce will obviously benefit the macro-economy. But in fact, the currentemployment structure of different industries is still hysteretic with the industrializationprocess, and the political and system barrier between urban and rural blocks the transfer ofrural workforce. Therefore, we should speed up the adjustment of the employment structureduring industries to implement proper configuration of the workforce resource during threeindustries, and should try to eliminate the political and system barrier between urban and ruralto promote the gradual transfer of urban and rural workforce and arrange the rest workforceadvisably. In that case, economic growth and social stability will come true with the solutionof the employment pressure.