Dissertation > Economic > Economic planning and management > Labor Economics > Countries in the world of labor economic profile > China

Empirical Study on the Relation between Economic Growth and Employment in Qingdao

Author ZhaoZuoZuo
Tutor WangYuanYue
School Ocean University of China
Course National Economics
Keywords economic growth employment growth empirical research cointegration test VEC error correction model
CLC F127;F249.2
Type Master's thesis
Year 2010
Downloads 92
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Economic growth is the precondition for employment growth. The famous "Okun’s Law" also shows that the change of unemployment rate opposite to the change of GDP growth, which presents a negative correlation, that is higher economic growth accompanied by lower unemployment rate, and lower economic growth rate accompanied by higher unemployment rate. However, the promoting effect on employment is less obvious in Qingdao city, the unemployment rate did not decline with the rapid economic growth, which is contrary to the general economic laws, and becomes an important research subject in the area of macro-economic. As the center of the Blue Peninsula economic area, little relevant research can be found. This paper analyses the correlation between economic growth and employment growth through econometric method and based on the existing theories. Then some reasonable policy recommendations are put forward to promote regional employment, which has some practical significance.In addition, through research and analysis of past research results the author found that most study just focused on the establishment of a general regression model, and did not pay due attention to the long-term interaction between the variables. In this paper, co-integration test will be used to analyse the long-term relationship between economic growth and employment growth, and to explore whether the economic growth and employment growth will significantly affect the relationship between economic and employment in the future from a dynamic point of view. By empirical study we found that a stable long-term relationship indeed exists between economic growth and employment growth in Qingdao City, and the economic data of Qingdao City also shows that employment growth has a pulling effect on economic growth, while does not apply on the reverse side. This conclusion is helpful to find how to maintain synchronous growth of employment growth when the economic growth rate is relatively slowed down.The first part is an introduction, this section firstly introduce the inconspicuous pulling effect of economic growth to employment growth in Qingdao city, thereby clearly define the practical significance of this research subject. Then the author describes the research methods and ideas, and make necessary introduction to relevant concepts.The second part is a literature review, the author overview the research of this topic by consulting relevant literatures, including the economic growth and employment theories and researches both in western countries and in domestic academic circles.The third part is the empirical research of the correlation between economic growth and employment growth in Qingdao City. First of all, the author reveals the inadequate pulling effect that economic growth acting on employment growth from three aspects—the relationship between economic growth rate and employment growth rate, economic growth and registered urban unemployment rate, economic growth and employment elasticity. Then the author does the unit root test and cointegration test on economic growth and employment growth, and establishes a "VEC error correction model", and tries to identify whether there is a long-term stable relationship between economic growth and employment growth through the Granger test. The study finds that a long-term stable relationship exists between economic growth and employment growth in Qingdao City, that is the economic growth of Qingdao effectively led to employment growth, and the "contradictions" mentioned above is just a superficial phenomenon. The relationship between economic growth and employment growth does break the "Okun’s Law."The forth part focuses on the influence of the industrial structure on economic growth and employment. First, the paper gives an interpretation of the industrial structure. On this basis, an objective description is given to The reveal the industry status of Qingdao City through relevant data. Then the author finds that the industrial structure of Qingdao City is not reasonable by analysing the data of industrial structure, economic and employment. The contradiction existing between the contribution of tertiary industries to economic growth and to employment is the prime reason of the inadequate pulling effect of economic growth to employment. In addition, the lagged changes in employment structure and industrial structure also contribute to this phenomenon.The fifth part gives the research conclusions based on previous research results, and some suggestions to control unemployment and promote employment.

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