STUDY ON LONG-RUN EQUILIBRIUM RELATIONSHIP BETWEEN INFORMAL EMPLOYMENT AND ECONOMIC GROWTH IN URBAN
Journal: Advanced Management Science (AMS)
Author:Maishou Li, Ziyi Dou, Xiuqin Wei, Yuxing Chong
This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited
Based on the panel data of 31 provincial levels in China from 2000 to 2015, this paper estimates the scale of urban informal employment in each region by using the Vogel method, and examines the long-term equilibrium relationship between urban informal employment and economic growth by comparing the labor productivity of the main industries in which informal employment is concentrated and by using the co-integration test and error correction model in the empirical analysis. The research shows that among the industries where informal employment is mainly concentrated, labor productivity is higher in sectors such as manufacture, building industry, and wholesale and retail industry. There is a cointegration relationship between informal employment and economic growth, and it has a short-term correction effect. When the short-term fluctuation of economic growth deviates from the long-term equilibrium, the adjustment intensity of 0.049 can pull the disequilibrium state back to the equilibrium state. The relationship between urban informal employment and economic growth is an “inverted U-shaped” curve. The scale of urban informal employment should be controlled at about 45%, and if it exceeds 45%, economic development will be inhibited. On this basis, the paper puts forward some policy suggestions, such as standardizing the informal employment labor market, protecting the legitimate rights and interests of workers and providing lifelong education and training for informal workers.