Abstract
Total factor productivity (TFP) is of critical importance to the sustainable development of construction industry. This paper presents an analysis on the impact of migrant workers on TFP in Chinese construction sector. Interestingly, Solow Residual Approach is applied to conduct the analysis through comparing two scenarios, namely the scenario without considering migrant workers (Scenario A) and the scenario with including migrant workers (Scenario B). The data are collected from the China Statistical Yearbook on Construction and Chinese Annual Report on Migrant Workers for the period of 2008–2015. The results indicate that migrant workers have a significant impact on TFP, during the surveyed period they improved TFP by 10.42% in total and promoted the annual average TFP growth by 0.96%. Hence, it can be seen that the impact of migrant workers on TFP is very significant, whilst the main reason for such impact is believed to be the improvement of migrant workers’ quality obtained mainly throughout learning by doing.
Highlights
Total factor productivity (TFP) plays a vital role in promoting the sustainable development of the construction industry
For Scenario A, during the surveyed period TFP increased by 60.44%, whilst the annual average TFP growth was 6.99%
Migrant workers have an outstanding impact on TFP: during the study period this group improved TFP by 10.42% in total and increased the annual average TFP growth by 0.96%
Summary
Total factor productivity (TFP) plays a vital role in promoting the sustainable development of the construction industry. As the previous researchers noted, the growth brought by the increase of labor and capital is exogenous and has a diminishing marginal utility, and a steady state of zero growth will approach [6,7]. Because this development mainly relies on innovation, such as technological progress, improvement of laborer’s quality and management innovation [8,9], which does not diminish rather even increases the marginal utility. It is a common strategy for any country to pursue higher TFP in construction
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