Impact of the Transforming and Upgrading of China’s Labor-Intensive Manufacturing Industry on the Labor Market

Abstract

The transforming and upgrading of China’s labor-intensive manufacturing sector is profoundly affecting the low-end labor market. However, there are few empirical studies that focus on labor-intensive manufacturing industries and that explore the impact of their transforming and upgrading on the labor market. Based on the wage and quantity of employment in the labor market, this paper examines the impact and the mechanism of the transforming and upgrading of China’s labor-intensive manufacturing industry on the labor market, using industry panel data from 2011 to 2019. The results show that the transforming and upgrading of labor-intensive manufacturing: (1) significantly improves the average wage of labor, but reduces the quantity of employment, and that this effect varies for different industry segments; (2) improves the average wage of labor through human capital factors and reduces the quantity of employment through labor productivity. The results suggest that we should focus on the impact of the transforming and upgrading of labor-intensive manufacturing on employment to achieve the synergistic development of employment quantity and quality, and ultimately promote sustainable labor market development.