An Analysis on the Employment Effect of Raising Remuneration of Labor: A Study Based on Labor Market Imbalance
This paper made an analysis on the employment effect of raising labor remuneration in a labor market, where real wage received by labor is lower than their contribution. A labor demand and supply model was established to make this research. Besides, a fixed effect model was used to test propositions drawn from the model. It can be concluded that rising remuneration of labor have no negative effect on employment in China where negative distortion in labor market exits. Moreover, rising remuneration of labor can stimulate domestic demand, which is beneficial to employment and the realization of labor market equilibrium. This research give up the hypothesis that labor market in China is equilibrium, and the conclusion is more accurate and meaningful.
Keywordsimbalanced market remuneration of labor negative distortion of labor market employment effect panel data
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