The Research On Industrial Upgrading And Unemployment

China’s economic growth based mainly on extensive model, which has led to the issues of economic decline and excessive consumption of resources, but also more and more serious environmental pollution problems. To address these issues government put forward to the view clear that China needed to accelerate the transformation of economic development and promote the optimization and upgrading of industrial structure in the report of 17th Party’s congress. However, it may be generated the negative effects from upgrading, which the unemployment would increase. Occurrence of high-tech industries must be the cause of the rising of organic composition, which will cause the occurrence of technical unemployment. In addition, the meaning of the upgrading of industrial structure itself is the historical evolution of the transformation from primary industry to secondary and tertiary industries, which will cause the occurrence of structural unemployment. This paper analyzed the impact mechanism between the upgrading of industrial structure and unemployment, then cites the theoretical models and the empirical analysis, and provides recommendations for solving the unemployment problem caused by upgrading of industrial structure.First, this paper defined the concept of industrial structure upgrading and unemployment, and then described relevant theories in detail and introduces the research scholars of this problem. Secondly, combined with China’s specific conditions, it established theoretical models of structural unemployment caused by industrial changing and technical unemployment caused by the change of technological progress based on the analysis of Coefficient of variation in industrial structure that is Todaro model and A-H model. At last it makes the studies of upgrading of industrial structure impacting on unemployment with the sample of 1978-2007 ISR, ISU, technological progress and the unemployment rate by multivariate linear regression. In the end this paper gave the conclusion and relevant suggestion.The main conclusion is that industrial structure upgrading effected on unemployment on two ways. The one is that part of labor in the primary industry would become to be unemployment when they transfer to the second and tertiary industries during the industry alternation. Due to the barriers of the access into the second and tertiary industries this part of the labor increased the urban registered unemployment rate. The other is the substitution part of labor for technical progress is larger than the complement part of labor, or says that the creative destruction effect was greater than the capitalization effect. In the end of the empirical analysis the results showed that the development of the tertiary industry has a great impact on reducing the unemployment rate. If the development of tertiary industry goes deeper it will help to ease the employment pressure, thereby reducing the unemployment rate.According to the findings, the paper proposes the solution that the agricultural industry should be promoted the structural adjustment, the education level of rural surplus labor force should be improved, the reform of the household registration system should be deepened, an efficient information platform should be built, vocational training for labor should be strengthen and the tertiary industry should give full play to create more jobs.