Labor Mobility and the Growth of Labor Productivity

Abstract

The mobility of production factors is one of the important factors influencing the growth of labor productivity, and the relationship between them can be explained by the Structural-Bonus Hypothesis. In other words, when factors of production move from a sector with a low productivity to a sector with a high productivity or from a sector with slow growth in productivity to a sector with fast growth in productivity, it will promote the increasing of productivity. In this paper, we use the shift-share method to study the impact of labor mobility among the three industries on the growth of labor productivity. It is found that labor mobility has a positive effect on the growth of productivity, that is, the Structural-Bonus Hypothesis exists, but it does not always exist. Labor mobility sometimes inhibits the growth of productivity. The growth of labor productivity in China largely depends on industry internal effect, such as the progress of technology, the promotion of laborers' quality and so on. Therefore, the more reasonable distribution of factors of production among the three industries is, the more conducive it is to the growth of labor productivity.