The Urbanization Effect On Employment And Policy Suggestions

This paper summarized relevant literature from abroad and domestic aspects. Foreign scholars from the perspective of population migration described urbanization as the process of rural labor and rural population to the city in a variety of factors, and discussed the relationship between the population urbanization and urban employment. Domestic research is mainly from the perspective of the factors of urbanization on employment, population migration, human capital investment, industrial structure changes and informal employment.The compensation mechanism and damage mechanism of the urbanization on employment exist at the same time, the former which include space effect, the population agglomeration effect, industrial structure effect, income effect, city circle group effect and the internationalization effects represents that the development of urbanization increase employment. The latter which include crowding out effect, “to be urbanization” effect, industrial technology effect,“urban disease” effect and the policy oriented effect represents that the development of urbanization reduces employment.The analysis of the employment of urban and rural structure, industrial structure, regional structure, ownership structure and knowledge structure show that, under the background of development of urbanization in our country, China continued to increase the scope of employment, the employment structure also been optimized. Although China’s employment structure optimization, the policy by government has played a certain positive effect by promoting employment. But China still faces huge employment pressure, the demographic dividend gradually weakened, the urban unemployment population is increasing, labor shortage phenomenon is serious, employment structural contradictions still exist, serious structural shortage of labor.By selecting time series data from 1978 to 2012 about urbanization level and employment, using ADF text, Cointegration test, Error correction model, Granger causality analysis, VAR model, Impulse response analysis, and variance decomposition, explore the relationship between urbanization and the employment of China. The empirical results show that the urbanization level and the employment have stable long-term equilibrium; changes in the urbanization is the Granger cause of employment, and the causal relationship is unidirectional; in the long-term,the urbanization bring a strong, persistent impetus to the employment, as well as the effect of the urbanization level to the employment proportion of third industry; the output of third industry have much more contribution to the fluctuations of urbanization level, the contribution rate of urbanization on the fluctuations of employment growth increased gradually with the lapse of time, and became stable to a certain level.This paper divided the development of urbanization level into two stages which based on the situation of urbanization and the changes of industry structure of employment. The one is 1978-1994 which has steady development of urbanization. The other is 1995-2013 in which the level of urbanization developed rapidly. By using ADF text, Cointegration test, Granger causality analysis, VAR model, explore the Influence of urbanization level on the employment structure. The empirical results show that in the long-term, the level of urbanization had the same effect on the employment structure in the two stages: The development of urbanization level increased the employment proportion of the second industry and the three industry, but had an adverse effect on the proportion of the first industry employment. In the early years of urbanization, employment proportion of the second industry and the three industry employment proportion increased faster than in the period of rapid urbanization development. In the short-term, during 1995-2013, the development of urbanization increased the employment proportion of the first industry, but had the opposite effect on the employment proportion of the second industry and the third industry. Urbanization of the three industry structure of employment in the short and long term effect is not consistent. The long-term effects and the short-term effect of urbanization on the employment structure of three industry effect is not consistent.