Labor linkages and flow paths of industry in China

Abstract

As economic power increases and market patterns adapt, labor becomes an increasingly significant factor of production. However, there is a dearth of discourse regarding the structural changes that have occurred in the correlation of the labor force across industries, as well as a visual representation of the labor force's movement across industries. To quantify and analyze the correlation effect with greater precision, it is necessary to establish an input-output model as the foundation of analysis, comparing the changes in the total output of the economic system prior to and subsequent to the exclusion using the vertical integration algorithm. By decomposing the path structure, the average propagation distance of the labor force population's demand for each industry can be determined. By employing labor force population data from the corresponding years and China's input-output tables published by the National Bureau of Statistics of China (NBS) from 2005 to 2020, this study conducts a quantitative analysis of the correlation effect between labor force population and the trend of its transfer across 19 industries. The findings indicate that the correlation effect between labor force and population is most pronounced in the manufacturing sector. Furthermore, the construction sector faces an especially critical requirement for labor force personnel from other industries. The article culminates with a recommendation that the government enhance its macro-control endeavors to address labor market risk shocks and take an active stance in response to labor market fluctuations.

Keywords

• Input-output models
• Labor force population
• Industry linkage effects
• Improved hypothetical extraction method
• Structural path analysis