Labor Growth Rate Research Articles

Impact of provincial competitiveness index (PCI) on economic development in the Red River Delta, Vietnam

The development of an economy is significant since it has far-reaching implications for several industries. Particularly, the income levels of inhabitants in crucial locations must reach a specific threshold for an economy to flourish effectively. To achieve this goal, it is vital to determine the factors that affect economic development. A significant aspect that can improve people's living standards is enhanced competitiveness. Therefore, this study employs the generalized ordinary least squares (GLS) method to examine the provincial competitiveness index (PCI) on economic development as measured by per capita income in the Red River Delta of Vietnam. The panel data of eleven Red River Delta provinces from 2010 to 2021 was studied. The results indicate that the provincial competitiveness index has a beneficial impact on economic growth and contributes to an increase in the income levels of the populace. The study also shows that labor literacy rate and trade openness also contribute to economic development while labor growth rate inhibits long-term economic development. Governments need to analyze indicators to find solutions to improve national competitiveness. In particular, it is necessary to pay attention to the business environment, apply technology in handling administrative procedures and have policies to support business capital creation for domestic enterprises.

ICT Innovation, FDI and Economic Growth: Evidence from BRICS

We make a comprehensive investigation of ICT innovation, FDI and economic growth nexus for BRICS countries for the periods between 1990 and 2021 using autoregressive distributed lag (ARDL) techniques. We use input-based ICT and non-ICT resources to capture ICT innovations, foreign direct inflows, gross domestic product and quantity of labor for this economic bloc. From our estimation, the following summary can be made. ICT is found to be consistently and significantly contributing to the economic growth rate of BRICS countries. However, with the negative impact of FDI on the growth rate, its interaction with ICT input resources was found to help mitigate the negative impact of FDI on economic growth which by implication suggests that adequate ICT infrastructure complemented with foreign-oriented investment can play a formidable role in increasing the growth process of the economies of BRICS. Also, non-ICT input resources and quantity of labor growth rate were found to be necessary variables worthy of giving appropriate consideration in explaining the growth rate of the economies. The study thus suggests the higher provision of both ICT and non-ICT input resources in the BRICS and a policy to attract able hands from developing countries to turn various resources for economic progress.

Aggregate Implications of Changing Sectoral Trends

We find disparate trend variation in TFP and labor growth across major U.S. production sectors over the post-WWII period. When aggregated, these sector-specific trends imply secular declines in the growth rate of aggregate labor and TFP. We embed this sectoral trend variation into a dynamic multi-sector framework in which materials and capital used in each sector are produced by other sectors. The presence of capital induces important network effects from production linkages that amplify the consequences of changing sectoral trends on GDP growth. Thus, in some sectors, changes in TFP and labor growth lead to changes in GDP growth that may be as large as three times these sectors' share in the economy. We find that trend GDP growth has declined by more than 2 percentage points since 1950, and that this decline has been primarily shaped by sector-specific rather than aggregate factors. Sustained contractions in growth specific to Construction, Nondurable Goods, and Professional and Business and Services make up close to sixty percent of the estimated trend decrease in GDP growth. In addition, the slow process of capital accumulation means that structural changes have endogenously persistent effects. We estimate that trend GDP growth will continue to decline for the next 10 years absent persistent increases in TFP and labor growth.

DEMOGRAPHIC SHIFTS AND TAX BURDEN IN THE IRANIAN ECONOMY: A MACROSIMULATION APPROACH

Using dynamic stochastic general equilibrium (DSGE) model, this paper addresses the effects of demographic changes on tax dynamics. In fact, the DSGE framework involves main demographic features such as working and retirement periods as well as life cycle characteristics on one hand and other special conditions of Iran’s economy such as rigidities in nominal variables, distinct trait of government budget and lack of monetary and fiscal standard rules on the other. After calibration of parameters and determination of steady state values of the variables, we identified some demographic scenarios, such as reduction in the labor growth rate, increasing retirement age and improvement life expectancy and then assessed macro variables, particularly tax share, reaction to these shocks. Our results highlight that, demographic negative shocks have a significant effect on the budget deficit. A plummet (surge) in labor growth rate would increase (shrink) tax share to rebalance (smooth) a probable budget deficit(surplus). An analogous result can be attributed to the life expectancy improvement. However, any upswing (slump) in the retirement age has negative(positive) influence on the tax share. In other words, all positive demographic shocks provide opportunity to smooth tax policies and postpone revenue collection.

Policy Implementation of the Elimination on Child Labor: Could Indonesia Be Achieve of Free Child Labor in 2022?

Currently it’s estimated that more than 152 million people are child laborers, around 10 percent of children worldwide. Most (71 percent) work in the agricultural sector. As many as 69 percent do unpaid work because they work in their own homes and nearly half (73 million people) work in jobs that endanger their health, safety and moral development. The objective of the paper is exploring the factors why a child of a child must work, policies in control the growth rate of child labor and finally in eliminating child labor in Indonesia. This study found the issue of child labor which involves many parties becomes a challenge for the parties to work together effectively to harmonize laws and regulations and law enforcement, expand and increase access to compulsory education and training, social protection and make effective policies to support an active labor market, and to create decent and productive jobs for adults. Moreover, coordination and synchronization between related parties in forms of social workers, government, community and stakeholders are needed.

Engines of sectoral labor productivity growth

We study the origins of labor productivity growth and its differences across sectors. In our model, sectors employ workers of different occupations and various forms of capital, none of which are perfect substitutes, and technology evolves at the sector-factor cell level. Using the model we infer technologies from US data over 1960-2017. We find that sectoral differences in labor productivity growth are largely due to sectoral differences in the growth rate of routine labor augmenting technologies. Neither capital accumulation nor the occupational employment structure within sectors explains much of the sectoral differences in labor productivity growth.

Empirics of Solow growth model in Nepali economy

Economic growth model developed by R. M. Solow explained the steady-state equilibrium in long run based on neoclassical production function with factor substitutions and diminishing returns in context of developed economy. As the nature of Nepali economy is different than developed economy, this paper aims to analyze economic growth of Nepal in the Solow growth model standard. Specifically, it aims to examine the effect of saving rate, labor growth and human capital on economic growth. On basis of steady-state equilibrium equation developed by Solow, regression equation is developed to find the effect of exogenous variables saving rate and labor growth rate on per capita GDP. Further, the model is extended by adding human capital as regressor. Data of 44 years of Nepali economy are used to analyze the model. Since time series of all the variables are stationary at first difference and they contain same stochastic trend, coefficients are estimated by using ordinary least square method. The analysis shows that the Solow model is applicable to Nepali economy as the predicted coefficients are very close to estimated coefficients. However, the estimated coefficients are very less than the predicted coefficients of the extended model. Furthermore, coefficient of labor growth rate is statistically insignificant in the extended model.

Diversity of industrial structure and economic stability: evidence from Asian gross value added

The paper provides evidence of convex growth-instability frontiers for 19 Asian countries based on the shares of different economic activities in gross value added between 1991 and 2016. Numerical simulations of gross value added shares show that Asian industry portfolios in 2014 were below the unbounded efficient frontier defined by Markowitz, and that rearranging the shares of economic activities leads to efficiency gains through higher income and lower output volatility. The data show that gross value added in Asian countries in general, and in Eastern Asia in particular, are contributed mainly by “other activity” and “transport” sectors, while optimal industry portfolios in Southern Asia and Southeast Asia are found to be more diversified. Stochastic frontier analysis confirms convex growth-instability frontiers and points to differences in labor growth rates and industrial diversification as the main sources of inefficiency. The results are robust to model specifications and data restrictions.

The Drag Effect of Water Resources on China’s Regional Economic Growth: Analysis Based on the Temporal and Spatial Dimensions

Studying the influencing factors of the drag effect of water resources and its temporal–spatial variation can help governments to solve the problem of water resource constraints on the economic growth of different regions. Based on Romer’s hypothesis, this paper uses panel data to empirically analyze the drag effect of water resources in China’s 31 provinces from 1987 to 2017. The research shows that: (1) Water resources have certain constraints on the economic growth of each region. Regional economic growth has declined by 0.23% (eastern), 0.07% (western), 0.43% (central) and 0.09% (northeastern) annually. (2) In provinces with rapid labor growth, water resources have a greater impact on economic growth. In provinces with low labor growth rates, the drag effect of water resources on economic growth is affected by the capital stock of the region. (3) Through the analysis of the water drag effect in different time periods, this paper finds that in some periods, the government’s mobilization of water resources for the economic growth in some regions will not only promote the transfer of labor between regions, but also cause changes in the regional water resources. According to the results of this paper, the following conclusions can be drawn: (1) It is necessary to vigorously develop water-saving agriculture, improve technical efficiency, and reduce the strong dependence of economic growth on water resources in the provinces which has a strong water drag effect on economic growth; (2) Provinces with moderate water resource constraints should take the lead in deploying strategic emerging industries, and accelerate the development of the tertiary industry; (3) Provinces with weakly water resource restrictions can promote the development of capital-based industries. Not only can the development of the economy be rational, but it can also reduce the economy’s dependence on resources, thereby achieving the sustainable use of water resources and sustainable economic growth.

Problems of developing and transition economies

ABSTRACTThe Solow growth model was extended to account for the graft by corrupt individuals from domestic savings, which could have been used for productive capital accumulation, the productive stock of capital to be augmented by foreign direct investment (FDI), and the expatriation by FDI international investors. The results indicate that higher levels of FDI inflows, savings rates, and more advanced technology embedded productive capital would result in higher steady-state per capita productive capital to labor ratio. The graft from domestic savings, expatriation of FDI, and growth rate of labor negatively affect steady-state per capita productive capital to labor ratio.

China's 2009–2050 Economic Growth: A New Projection Using the Marxian Optimal Growth Model

According to Shen and Onishi, China's economy is predicted to reach zero-growth in 2040 and 2033, respectively. Both studies have attracted significant attention in academia. However, their theoretical models have two inadequacies. First, the Euler equations used to depict the dynamic path of the economy are not derived. Second, the labor growth rate is not incorporated into the model. These inadequacies make their empirical projections arbitrary under strict assumptions. Therefore, we derive the Euler equations of the model using dynamic formulations by incorporating the labor growth rate into our model. Using the Euler equations, we depict the path of the Chinese economy from 2009 to 2050. The result indicates that, in 2026, China's GDP would surpass US GDP. Moreover, around 2050, China's GDP is projected to be almost 2.22 times higher than US GDP, while the GDP per capita will be half the US GDP per capita.

Explaining Economic Growth in Developed Economies after 1980

We use the Aguion and Howitt (2009) theoretical model of endogenous economic growth to explain the declining economic growth in developed economies in the period 1981-2009. Aguion and Howitt theoretical framework combines Solownian and Schumpeterian elements in a single scenario, so that labor-augmenting technological progress and capital accumulation per efficiency unit of labor are both caused not only by exogenous changes in the investment rate but also by shocks to the degree of efficiency in the Research and Development (R&D) expenditure process. Empirical results revealed that per worker output growth rates and capital stock per efficiency unit of labor growth rates both have a common panel unit root. Since the panel cointegration tests and estimates revealed a statistical significant negative long-run relationship between per worker output growth rate and capital stock per efficiency unit of labor, the interpretation of the econometric results analized from the Aguion and Howitt s theoretical perspective is that labor-augmenting technological progress is endogenously falling over time mainly because of an exogenous deterioration of the environment conditions for the transformation of the investment rate and R&D expenditures in technological progress.

The Relationship between China’s Population Structure Change in Minority Areas, Economic Growth and Demographic Dividend—Based on an Empirical Analysis of Time Series Data from 1992 to 2012

Because the sustainability of the economic development model has drawn much attention recently, the academic circle and the government have begun to focus on the population of minority areas. In past literature, due to the lack of the positive analysis of the relationship between minority population transition and economic development, and due to sample limitation and other factors, the research result is not very convincing. This paper used the economic convergence theory to establish a theoretical model, and selected the panel data in eight minority-concentrated provinces from 1992 to 2012 to analyze the impact of population transition in these provinces on economic growth. The result reveals a significant positive correlation between investment, human capital, the growth rate of labor and per capita GDP growth, a significant negative correlation between children’s dependency ratio and per capita GDP growth, and an uncertain relationship between elderly dependency ratio and per capita GDP growth. To maximize the democratic dividend, it is necessary to speed up the development of educational undertakings in minority areas, and to accelerate the industrial structure transition of minority areas. It is also important to perfect institutional improvement of minority areas.

The Ramsey Model in Discrete Time and Decreasing Population Growth Rate

This paper reformulates the neoclassical Solow model of economic growth in discrete time by introducing a generic population growth law that verifies the following properties: 1) population is strictly increasing and bounded; 2) the rate of growth of population is decreasing to zero as time tends to infinity. We show that in the long run the capital per worker of the model converges to the non-trivial steady state of the Solow-Swan model with zero labor growth rate. In addition we prove that the solutions of the model are asymptotically stable.

Long cycles in a modified Solow growth model

In this paper we analyze the dynamics of the Solow growth model with a generic production function. For this purpose, we consider that the labor growth rate, $$L^{\prime }(t)/L(t)$$ , is a $$T$$ -periodic function, for a fixed positive real number $$T$$ . We obtain the closed form solutions for the fundamental Solow equation with the new description of $$L(t)$$ , using a Cobb–Douglas production function. Using notions of the qualitative theory of ordinary differential equations and nonlinear functional analysis, we prove that there exists a $$T$$ -periodic solution for the Solow equation with a generic production function. From the macroeconomic point of view this is a refined Solow model, which exhibits a smooth cyclic behavior in the economy with long period and relatively small amplitude.

The safety-level gap between China and the US in view of the interaction between coal production and safety management

Coal production is an activity with marketable output and safety output, and the interaction between coal production and safety inputs reflects the relationship between economic development and occupational safety. Through analysis of the long-term interaction between coal production and safety inputs, this paper divides a country’s stages of safety level into developing stage, stable stage and transcending stage. According to the basic principle of the Cobb–Douglas production function, a coal production model is set up, and regression analysis is conducted using EViews software. The results indicate that China has not yet achieved the best balanced status but has remained in the developing stage; while the US has been in the stable stage. The impulse response curves indicate that the rate of technological progress had the most obvious response and that technological progress was an important support of economic output. For China, the safety input showed a secondary effect and was also an effective method for improving economic output. However, the labor growth rate had little influence on coal production and no direct impact on economic output at this stage. If the difference in development stages is measured only by labor productivity, then China needs at least 30years to reach the safety production level of the US. Some suggestions to enhance Chinese coal-mine safety are proposed through learning from the US and Australian experience.

Job Growth and Finance: Are Some Financial Institutions Better Suited to the Early Stages of Development than Others?1

Evidence based on firm-level data from 89 countries with updated country-level data on financial structure suggests that in low-income countries, labor growth is more rapid in countries with a higher level of private credit/GDP. This positive relationship with private credit is especially pronounced in industries that depend heavily on external finance. The results, which are robust to multiple estimation approaches, are consistent with the predictions of new structural economics. In high-income countries, labor growth rates increase with the level of stock market capitalization, consistent with predictions from new structural economics. However, the association disappears when stock market development is treated as an endogenous explanatory variable using instrumental variable regressions. There is no evidence that small-scale firms in low-income countries benefit the most from the development of the private credit market. Rather, the labor growth rates of larger firms increase to a greater extent than others with the level of private credit market development, a finding consistent with the perspective from historical political economy that banking systems in low-income countries serve the interests of the elite rather than providing broad-based access to financial services.

Capital Ownership And Its Impact On International Trade And Economic Growth: The Tunisian Experience

Despite the widespread belief that a privatized economy performs better than a centrally planned one, there is no empirical evidence on whether changing the structure of capital ownership affects trade and growth in developing countries. This paper addresses this issue by analyzing and comparing the distinctive effects of privately and publicly owned capital on international trade and economic growth. Based on a modified version of the neo-classical one-sector aggregate production technology, we investigate the intertemporal interactions among the growth rate of real output, private capital, public capital, international trade and labor. The results of applying our methodology to data from Tunisia suggest that private capital performs better than public capital in promoting economic growth and international trade. Despite the widespread belief that a privatized economy performs better than a centrally planned one, there is no empirical evidence on whether changing the structure of capital ownership affects trade and growth in developing countries. This paper addresses this issue by analyzing and comparing the distinctive effects of privately and publicly owned capital on international trade and economic growth. Based on a modified version of the neo-classical one-sector aggregate production technology, we investigate the intertemporal interactions among the growth rate of real output, private capital, public capital, international trade and labor. The results of applying our methodology to data from Tunisia suggest that private capital performs better than public capital in promoting economic growth and international trade.

Delay differential neoclassical growth model

Abstract This paper develops a continuous-time neoclassical growth model with time delay. Despite of its simple structure, the resulting dynamic system shows emergence of erratic fluctuations in the capital accumulation process when the production function is unimodal and the delay in production is explicitly considered. It complements the seminal paper of Day (1982) in which a discrete-time neoclassical growth model displayed chaotic behavior for some configurations of the propensity to save, the growth rate of labor and the capital depreciation rate. Our analysis has at least two implications. First, nonlinearities and delay matter for a birth of aperiodic fluctuations of national product in the continuous-time model. Second, comparing the effects caused by two different time delays, fixed and continuously distributed time delays, reveals that the continuous-time model with the former can generate complex fluctuations while the one with the latter generates simple fluctuations when the shape parameter of the density function is small and complex fluctuations when large.

Economic Growth with Foreign Capital

AbstractIn growth theory, foreign investment places a small open economy in the international steady state. In applied growth theory, foreign investment is assumed to shift technology. The present growth model separates foreign from domestic capital and develops the steady state where both capital/labor ratios are stationary. A capital scarce country would attract foreign investment and may arrive at a steady state with perpetual foreign investment. Such a steady state foreign investment host is characterized by low saving and high labor growth rates, and source countries the opposite. Incomplete convergence characterizes economic growth with foreign capital.