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The wage transition in developed countries and its implications for China

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dc.contributor.authorBelal Ehsan Baaquie
dc.contributor.authorBertrand M. Roehner
dc.contributor.authorQing-hai Wang
dc.date.accessioned2018-02-04T14:43:31Z
dc.date.available2018-02-04T14:43:31Z
dc.date.issued2017
dc.description.abstractThe expression "wage transition" refers to the fact that over the past three decades in almost all developed economies wage increases have leveled off. There has been a widening divergence and decoupling between wages on the one hand and GDP per capita on the other hand. Yet, in China wages and GDP per capita climbed in sync (at least up to now). In the first part of the paper we present comparative statistical evidence which measures the extent of the wage transition effect. In a second part we consider the reasons of this phenomenon, in particular we explain how the transfers of labor from low productivity sectors (such as agriculture) to high productivity sectors (such as manufacturing) are the driver of productivity growth, particularly through their synergetic effects. Although rural flight represents only one of these effects, it is certainly the most visible because of the geographical relocation that it implies; it is also the most well-defined statistically. Moreover, it will be seen that it is a good indicator of the overall productivity and attractiveness of the non-agricultural sector. Because this model accounts fairly well for the observed evolution in industrialized countries, we use it to predict the rate of Chinese economic growth in coming decades. Our forecast for the average annual growth of real wages ranges from 4% to 6% depending on how well China will control offshoring and the development of its healthcare sector.en_US
dc.identifier.citationBaaquie, B. E., Roehner, B. M., & Qing-hai, W. (2017). The wage transition in developed countries and its implications for China. Physica A, 470, pp. 197-216.en_US
dc.identifier.doihttps://doi.org/10.1016/j.physa.2016.11.092
dc.identifier.issn0378-4371
dc.identifier.urihttps://ikr.inceif.edu.my/handle/INCEIF/2797
dc.languageEnglish
dc.language.isoengen_US
dc.publisherElsevieren_US
dc.rights2017. Elsevier
dc.sourceSEDONA
dc.subjectProductivityen_US
dc.subjectDemographic transitionen_US
dc.subjectEconomic growthen_US
dc.subjectWageen_US
dc.subjectEarningsen_US
dc.subjectAgricultureen_US
dc.subjectIndustryen_US
dc.subjectPrimary sectoren_US
dc.subjectSecondary sectoren_US
dc.subjectTertiary sectoren_US
dc.titleThe wage transition in developed countries and its implications for Chinaen_US
dc.typeJournal Articleen_US
dlc.maintopicConventional financeen_US
dspace.entity.typePublication
ikr.doctypeScholarly Works
ikr.topic.maintopicConventional financeen_US
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