8 Employment Elasticity and Its Implications for Employment Policy in the “12th Five-Year Period”

Abstract

This chapter discusses the policy implications of changes to employment elasticity during the 12th Five-year Plan. The majority of studies on changes in employment elasticity find that China's employment elasticity began to show a clear downward trend starting in 1990s, that China's rapid economic growth has not led to a corresponding increase in employment, and that there is significant non-uniformity between employment growth and economic growth. Urban employment elasticity has exhibited an overall upward trend since early 1990s, exhibiting greater economic growth employment elasticity than calculating based on overall urban-rural method and the three-industries method. Thus, during the period of the 12th Five-year Plan, promoting new-style, urbanized development through focus on promoting the service industry brings about a greater employment-promotion effect. A basic public service system can provide effective information support to address frictional unemployment, reduce the impact of economic fluctuations on employment, and increase the stability of employment. Keywords: 12th Five-year Plan; employment elasticity; employment policy; public service system; urbanized development