A Research On The Effectiveness Of Active Labor Market Policies In China

Global economic slowing down and high unemployment rate after the financial crisis, the world has to face the employment problems.Chinese government introduced a series of measures aimed to promote economic growth, thereby increasing employment. Our active labor market employment policy was put in use in 2002, developing rapidly after the financial crisis. The twelfth "Five Year Plan" proposed the implementation of a more active labor market policy, which made a clear request, including any possibility to expand the scale of employment and entrepreneurship, improving tax relief, job subsidies, training subsidies and other policies, improving and implementing small loans, improving employment assistance policies, multi-channel development of public service jobs and strengthening the public employment service. In this context, the evaluation of the effectiveness of active labor market policy has wonderful meanings.This paper studies the effectiveness of active labor market policy, mainly from three aspects. First, through the theoretical basis, the labor market supply and demand curves and the theoretical frameworks building analyzed the effectiveness of active labor market policy. Second, both horizontal and vertical reflects the expenditure scale of active labor market policy. Through Lateral international comparison, OECD countries active labor, market policy expenditure as a percentage of GDP is about 0.58%, while China’s is 0.14%. The scale.of expenditure shows China’s scale is low comparing to OECD countries. The vertical development shows China’s expenditure of active labor market policy has been raising since 1998, the cumulative investment accumulating 409.942 billion yuan at the end of 2012. Third, establishing regression equation between employment and active labor market policy/economic growth, active labor market policy draws valid conclusions. Concrete results, (1) using 1998-2012 national macro-level time series data, active labor market policy is effective, employment and active labor market policy significantly positively correlated, the regression coefficient is 0.08; (2) using 2005-2012 provincial panel data for further research, we find that active labor market policy is significantly effective and the regression coefficient is 0.8, but the provincial paned data fixed effects model shows that the active labor market policy effectiveness differs from provinces. Therefore, China’s active labor market policy is effective, but there are still areas for improvement.Based on the above conclusions, points to promote the effectiveness of active labor market policy recommendations:First, promoting economic growth and expanding employment interaction; Second, increasing financial input in active labor market policy to serve more workers. Third, vigorously promote the cultivation and construction of labor market.