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An empirical analysis of China's dualistic economic development: 1965-2009

Ercolani, Marco G.; Wei, Zheng

Authors

Marco G. Ercolani M.G.Ercolani@bham.ac.uk

Zheng Wei Zheng.Wei@nottingham.edu.cn

Abstract

We analyze China's rapid economic development in the context of the dualistic development theory. Over the period 1965–2009, we find that China's economic growth is mainly attributable to the development of the non-agricultural (industrial and service) sector, driven by rapid labor migration and capital accumulation. We find that the sectoral reallocation of labor plays a significant role in promoting China's economic growth. Further, we find that the marginal productivity of agricultural labor stopped stagnating in 1978, which indicates that China entered quickly into phase two of economic development with the initiation of market reforms. Moreover, by 2009, the marginal productivity of labor has likely exceeded the institutional wage, as defined by the initially low average labor productivity, indicating that China may be now in the process of entering phase three of economic development.

Journal Article Type Article
Publication Date Oct 30, 2011
Journal Asian Economic Papers
Print ISSN 1535-3516
Electronic ISSN 1535-3516
Publisher Massachusetts Institute of Technology Press
Peer Reviewed Peer Reviewed
Volume 10
Issue 3
Institution Citation Ercolani, M. G., & Wei, Z. (2011). An empirical analysis of China's dualistic economic development: 1965-2009. Asian Economic Papers, 10(3), doi:10.1162/ASEP_a_00108
DOI https://doi.org/10.1162/ASEP_a_00108
Publisher URL http://www.mitpressjournals.org/doi/abs/10.1162/ASEP_a_00108
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingh.../end_user_agreement.pdf
Additional Information Copyright MIT Press.

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf



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