Evaluating Impacts of the Ternary Structure Change of Population in Urban and Rural Areas on Industrial Development in China

Abstract

Since the reform and opening up, the scale of migrant workers in China has been growing steadily. Its scale has rapidly increased from less than 2 million in the early years of reform to 280 million in 2017, accounting for more than 20% of China's total population. Migrant workers contribute significantly to China’s urbanization and modernization. As a factor of production, its structural changes will inevitably have a profound and far-reaching impact on economic structure changes. In our knowledge, there has no research that estimated the impacts of the urban and rural labor structural change on the detailed industries like manufacturing, construction, wholesale and retail, residential service, repair and other service etc., which are most of migrant workers engaged in. We used Cobb-Douglas production function to estimate the economic growth of the detailed industries and the ridge regression method to estimate the parameters and significance of each explanatory variable in CD functions. The results show that migrant workers have significant contribution to the growth of the four industries, most to the manufacturing. However, the results revealed that the increase of migrant workers in manufacturing and service industries did not promote the development of them. The technical education and training of migrant workers should be strengthened.