A Theoretical And Empirical Research About The Impact Of Relatively Biased Technology Progress On Industrial Structure Deviation

Over the years, the industrial structure deviation keeps arising in China. A mass of labor force resorts in the country, while the employment pressure for college graduates and the shortage in migrants and mechanic exist all at once, which may seem contradictory. In theory, the difference in the industrial technology progress is able to explain the industrial structure deviation. Existing literatures on the industrial structure deviation ignored the heterogeneity of labor force. On the other hand, the research on the influence of the technology progress on industrial structure deviation was limited to empirical analysis, lack of the necessary theory to support it. This essay mainly explores the influence and the mechanism of relatively biased technology progress on industrial structure deviation in theory and in practice, taking the heterogeneity of labor force in consideration.Firstly, this essay analyses the present situation about the industrial structure and the industrial technology progress in China. By the analysis of the industrial structure deviation in China, it finds that there is huge employment space in the second and third industry. Meanwhile, compared with existing analysis, the deviations in the case of labor heterogeneity are different. The deviations in the first and third industry were overvalued and the deviation in the second industry was underestimated. The labor force employed in the second industry is of low human capital and the human capital of the labor force employed in the third industry is widely distributed, while the development of the third industry is insufficient. By the analysis of the industrial technology progress, it finds that the technology progress in the second and the third industry are both capital biased. What's more, the technology progress in the second industry is relatively capital biased, comparing to the technology progress in the third industry.Secondly, based on the present situation of the economy structure and the technology progress, this essay builds up a new theoretical model to explore the impact of relatively biased technology progress on industrial structure deviation. It finds that, the relatively biased technology progress indeed has an effect on the industrial structure and improper technology progress will enlarge the degree of industrial structure deviation. In concrete terms, it means that when the industrial structure deviation index is positive(negative), relatively capital(labor) biased technology progress will expand the deviation.Finally, the theoretical result is demonstrated by a systematic empirical analysis which shows that the relatively capital biased technology progress enlarged the deviation in the second industry actually. It also finds that the main point to solve the problem of industrial structure deviation and employment pressure in China is to stimulate consumer spending, optimize the structure of labor supply, raise the quality of workers, promote urbanization process and to improve the market mechanism.